Nvidia (NASDAQ: NVDA) and Broadcom (NASDAQ: AVGO) have both recently announced 10-for-1 stock splits, reflecting the impressive growth in the artificial intelligence (AI) market. These tech giants have seen their shares surge past $1,000 as demand from AI customers continues to drive revenue growth.
Analysts predict that the AI market, currently valued at $200 billion, could exceed $1 trillion by the end of the decade. This growth outlook, combined with Nvidia’s and Broadcom’s own expansion plans, makes both companies attractive investments. However, if you had to choose between the two stock split giants, which would be the better buy?
Nvidia is a leading provider of graphics processing units (GPUs) that power essential AI tasks like training and inferencing. The company also offers a range of products and services to support AI initiatives and is venturing into new areas such as sovereign AI. With Nvidia’s earnings consistently growing by triple digits each quarter and revenue hitting record highs, the company is well-positioned for continued success.
Broadcom, on the other hand, is a semiconductor and networking expert that has seen significant growth in AI datacenters. The company’s AI revenue surged by 280% in the last quarter, and it expects this segment to reach beyond $11 billion for the full year. Broadcom’s recent acquisition of VMware, a cloud software company, has also boosted its revenue and earnings potential.
While both companies are strong contenders in the AI market, Broadcom may offer a more compelling investment opportunity at this time. The stock is currently trading at a discount to Nvidia and presents a reasonable valuation in relation to forward earnings estimates. Additionally, Broadcom is just starting to reap the benefits of the VMware acquisition, which could further drive its performance in the future.
Investors looking to capitalize on Broadcom’s growth story can either wait for the stock split to purchase a smaller stake at a lower price or buy in now at the current levels. With Broadcom’s post-split price expected to be around $165, those planning to invest a larger sum may find it more beneficial to enter the market sooner rather than later.
In conclusion, both Nvidia and Broadcom are solid choices for investors looking to tap into the potential of the AI market. However, based on current valuations and growth prospects, Broadcom appears to offer a more attractive opportunity for those seeking exposure to this high-growth sector.
