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NVIDIA vs. Broadcom: Which AI Stock Should You Buy After Earnings?
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Key Takeaways
NVIDIA's Data Center revenues jumped 117%, while total fiscal Q2 revenues rose 106% year over year.
Broadcom's AI semiconductor revenues surged 221%, with Q4 guidance calling for 236% year-over-year growth.
NVIDIA's 63.7% net margin and 22.85 forward P/E compare with Broadcom's 42.9% and 29.2.
NVIDIA Corporation (NVDA - Free Report) and Broadcom Inc (AVGO - Free Report) both have capitalized on the robust artificial intelligence (AI) spending, with their latest quarterly results highlighting strong performance across key AI-related businesses. This raises an important question: which among the two is a better buy now for investors? Let’s have a look –
NVDA’s AI Growth Momentum Remains Strong as Demand Soars
According to NVIDIA’s Aug. 26 press release, the company’s fiscal second-quarter 2027 revenues reached $96.2 billion, up 106% year over year and 18% quarter over quarter. The Data Center business remained the key growth driver, generating $89 billion in revenues, up 117% year over year and 18% sequentially.
Alongside rapid top-line growth, NVIDIA delivered strong profitability. The company’s non-GAAP gross margin came in at 75%, up from 72.5% a year ago. Notably, continued high operating income helped the company translate its revenue gains into faster earnings growth.
NVIDIA’s growth momentum is expected to continue in the next quarter as well. The company expects revenues of around $108 billion, plus or minus 2%, in the fiscal third quarter of 2027, up 12% sequentially from the midpoint. NVIDIA, in reality, is well-positioned to gain from the next wave of AI investment as its cutting-edge Vera Rubin platform is already in full production
Solid Chip and Networking Demand Drives AVGO’s AI Business
Broadcom reported $29.6 billion in revenues for the fiscal third quarter of 2026, up 86% year over year, according to the company’s Sept. 2 press release. The key takeaway is that Broadcom’s AI semiconductor revenues reached $16.7 billion, up 221% year over year and 54% sequentially.
Broadcom continues to benefit from the AI boom through custom chips and high-speed networking solutions. Ongoing AI spending is helping Broadcom’s business gain momentum quarter over quarter. The company now expects AI semiconductor revenues to accelerate to $21.7 billion in the fiscal fourth quarter of 2026, increasing 236% year over year. Consolidated revenue guidance for the fiscal fourth quarter stands at $34.8 billion, up 93% year over year.
Along with rapid revenue growth, Broadcom’s profitability remains a major strength. Broadcom’s non-GAAP operating income rose 92% year over year to $20.1 billion in the fiscal third quarter, while free cash flow climbed 95% to $13.7 billion, giving the company strong financial flexibility to invest in research and development as well as growth.
NVIDIA or Broadcom: The Better AI Stock to Buy Post Earnings
The latest quarterly results show that NVIDIA is witnessing strong AI-driven growth led by Data Center demand. Broadcom, on the other hand, is benefiting from an increase in demand for its custom AI chips and networking solutions.
However, NVIDIA has a broader competitive moat that extends beyond its chips. While Broadcom’s AI opportunity is mostly centered on custom accelerators and networking, NVIDIA has created a powerful ecosystem by combining graphics processing units, CUDA, networking and AI software.
NVIDIA also benefits from a more diversified customer base than Broadcom’s handful of custom-accelerator businesses. Moreover, NVIDIA has demonstrated enormous scale while maintaining strong growth and profitability.
Lastly, NVIDIA’s 63.7% net profit margin, compared with Broadcom’s 42.9%, indicates NVIDIA’s greater efficiency in converting revenues into bottom-line profits.
Image Source: Zacks Investment Research
Therefore, NVIDIA appears to be the better buy than Broadcom, thanks to its stronger AI ecosystem, broader customer base, scale and stronger profitability. Additionally, NVIDIA appears more attractively valued than Broadcom. Per the price-to-earnings ratio, NVDA trades at 22.85 forward earnings compared with AVGO’s 29.24 forward earnings multiple.
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NVIDIA vs. Broadcom: Which AI Stock Should You Buy After Earnings?
Key Takeaways
NVIDIA Corporation (NVDA - Free Report) and Broadcom Inc (AVGO - Free Report) both have capitalized on the robust artificial intelligence (AI) spending, with their latest quarterly results highlighting strong performance across key AI-related businesses. This raises an important question: which among the two is a better buy now for investors? Let’s have a look –
NVDA’s AI Growth Momentum Remains Strong as Demand Soars
According to NVIDIA’s Aug. 26 press release, the company’s fiscal second-quarter 2027 revenues reached $96.2 billion, up 106% year over year and 18% quarter over quarter. The Data Center business remained the key growth driver, generating $89 billion in revenues, up 117% year over year and 18% sequentially.
Alongside rapid top-line growth, NVIDIA delivered strong profitability. The company’s non-GAAP gross margin came in at 75%, up from 72.5% a year ago. Notably, continued high operating income helped the company translate its revenue gains into faster earnings growth.
NVIDIA’s growth momentum is expected to continue in the next quarter as well. The company expects revenues of around $108 billion, plus or minus 2%, in the fiscal third quarter of 2027, up 12% sequentially from the midpoint. NVIDIA, in reality, is well-positioned to gain from the next wave of AI investment as its cutting-edge Vera Rubin platform is already in full production
Solid Chip and Networking Demand Drives AVGO’s AI Business
Broadcom reported $29.6 billion in revenues for the fiscal third quarter of 2026, up 86% year over year, according to the company’s Sept. 2 press release. The key takeaway is that Broadcom’s AI semiconductor revenues reached $16.7 billion, up 221% year over year and 54% sequentially.
Broadcom continues to benefit from the AI boom through custom chips and high-speed networking solutions. Ongoing AI spending is helping Broadcom’s business gain momentum quarter over quarter. The company now expects AI semiconductor revenues to accelerate to $21.7 billion in the fiscal fourth quarter of 2026, increasing 236% year over year. Consolidated revenue guidance for the fiscal fourth quarter stands at $34.8 billion, up 93% year over year.
Along with rapid revenue growth, Broadcom’s profitability remains a major strength. Broadcom’s non-GAAP operating income rose 92% year over year to $20.1 billion in the fiscal third quarter, while free cash flow climbed 95% to $13.7 billion, giving the company strong financial flexibility to invest in research and development as well as growth.
NVIDIA or Broadcom: The Better AI Stock to Buy Post Earnings
The latest quarterly results show that NVIDIA is witnessing strong AI-driven growth led by Data Center demand. Broadcom, on the other hand, is benefiting from an increase in demand for its custom AI chips and networking solutions.
However, NVIDIA has a broader competitive moat that extends beyond its chips. While Broadcom’s AI opportunity is mostly centered on custom accelerators and networking, NVIDIA has created a powerful ecosystem by combining graphics processing units, CUDA, networking and AI software.
NVIDIA also benefits from a more diversified customer base than Broadcom’s handful of custom-accelerator businesses. Moreover, NVIDIA has demonstrated enormous scale while maintaining strong growth and profitability.
Lastly, NVIDIA’s 63.7% net profit margin, compared with Broadcom’s 42.9%, indicates NVIDIA’s greater efficiency in converting revenues into bottom-line profits.
Image Source: Zacks Investment Research
Therefore, NVIDIA appears to be the better buy than Broadcom, thanks to its stronger AI ecosystem, broader customer base, scale and stronger profitability. Additionally, NVIDIA appears more attractively valued than Broadcom. Per the price-to-earnings ratio, NVDA trades at 22.85 forward earnings compared with AVGO’s 29.24 forward earnings multiple.
Image Source: Zacks Investment Research
NVIDIA currently has a Zacks Rank #1 (Strong Buy), while Broadcom has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks Rank #1 stocks here.