Nvidia leads Broadcom and AMD in 3-way AI chip stock race

Nvidia trades at 30 times earnings despite 85% revenue growth, making it cheaper than Broadcom at 21x forward earnings and far below AMD — a valuation anomaly in the AI chip sector that pits three very different semiconductor strategies against each other.

"Custom AI chips will likely become quite popular over the next few years as AI hyperscalers look to optimize their spending," the analysis said, framing the divergence between Nvidia's general-purpose graphics processing units and Broadcom's tailored application-specific integrated circuits.

Nvidia's fiscal 2027 first-quarter revenue reached $81.6 billion, up 85% year over year, with net profit margin above 70%. The company guided for $91 billion in the second quarter, representing more than 10% sequential growth. By comparison, Walmart trades at 39 times earnings with none of Nvidia's growth rates. Broadcom reported record revenue of $22.2 billion in its fiscal 2026 second quarter, up 48%, with adjusted earnings per share of $2.44, a 54% increase. The company expects third-quarter revenue of $29.4 billion, which would represent roughly 84% growth, with adjusted EBITDA of $20 billion, up 100%.

The stakes extend beyond quarterly numbers. Broadcom's custom XPU chips for Alphabet, Meta Platforms, Anthropic, and OpenAI are scheduled to ramp production late this year and into 2027. Wall Street projects Broadcom revenue of $106 billion in 2026, $172 billion in 2027, and $229 billion in 2028 — more than doubling over two years. Nvidia's expansion into agentic AI and physical AI, plus its hiring of an orbital data center system architect, signals it is positioning for demand beyond traditional cloud workloads.

AMD's valuation gap widens

AMD has been the 2026 outperformer among the three, but its stock now carries the highest price tag. Using current fiscal year earnings projections, AMD trades significantly more expensive than both Nvidia and Broadcom. Even on next fiscal year estimates, Nvidia remains the cheapest of the trio. The source analysis described AMD's rally as having "likely gotten ahead of itself," given its uphill battle to win data center share from Nvidia's entrenched CUDA ecosystem.

Broadcom's Apple deal adds non-AI ballast

Beyond the AI arms race, Broadcom secured a $30 billion multiyear deal with Apple to design custom silicon components and wireless connectivity technologies for iPhones, covering 5G, Wi-Fi, GPS, and Bluetooth. The agreement includes a $1.5 billion expansion at Broadcom's Fort Collins, Colorado facility and is expected to produce more than 15 billion chips made in the US through 2031. The deal underscores that Broadcom's legacy wireless business provides a revenue base independent of AI spending cycles.

Nvidia shares, trading at 30 times earnings with 85% revenue growth, present a valuation disconnect relative to slower-growing peers. Broadcom's 0.54 price-to-earnings-growth ratio — below the 1.0 threshold that signals undervaluation — suggests the market has not fully priced in its 2027 custom-chip ramp. AMD's elevated multiple leaves little room for execution missteps in its data center GPU push.

This article is for informational purposes only and does not constitute investment advice.