AMD vs. AVGO: Which AI Chip Stock Could Deliver Higher Returns in 2026, According to Analysts?

The artificial intelligence (AI) boom has created massive demand for advanced chips, significantly benefiting semiconductor giant Nvidia (NVDA). However, competition in the AI chip space is heating up, with several analysts seeing robust growth potential for Advanced Micro Devices (AMD) and Broadcom (AVGO). Using TipRanks’ Stock Comparison Tool, we placed AMD and AVGO against each other to find the AI chip stock with a higher upside potential, according to Wall Street analysts.

Advanced Micro Devices (NASDAQ:AMD) Stock

AMD stock has rallied 78% year-to-date, driven by optimism about the chipmaker’s ability to capture AI opportunities through its new GPUs (graphics processing units) and further share gains in the CPU (central processing unit) market.

The company’s strategic deals with OpenAI (PC:OPAIQ) and Oracle (ORCL) have boosted investor sentiment about its AI growth story. At the Financial Analyst Day held in November, CEO Lisa Su expressed confidence in the company’s ability to achieve a double-digit share in the data center AI chip market over the next three to five years. Moreover, Su expects AMD’s overall revenue to grow by about 35% per year over the next three to five years, driven by “insatiable” demand for AI chips.

Is AMD Stock a Buy or Sell?

Recently, Piper Sandler analyst Harsh Kumar reiterated a Buy rating on AMD stock with a price target of $280. Following a recent meeting with management, the 5-star analyst said that he is positive about the company’s near- and mid-term catalysts and the ability to execute its upcoming goals, including the MI300 series ramp and progress towards the MI400 series launch.

Kumar noted that AMD is allocating a huge amount of its resources toward the Helios rack, which is expected to be launched in mid-2026. The analyst added that management plans to have a fairly diverse set of customers in addition to OpenAI, which he believes will bring a “level of acceptance for AMD technology to the AI ecosystem.” Kumar also highlighted AMD’s focus on open standards across both networking and software.

With 29 Buys and nine Holds, Wall Street has a Strong Buy consensus rating on Advanced Micro Devices stock. The average AMD stock price target of $279.94 indicates 31.2% upside potential.

See more AMD analyst ratings.

Broadcom (NASDAQ:AVGO) Stock

Broadcom stock enjoyed a strong rally from April through the announcement of the company’s Q4 FY25 results, thanks to strong demand for its custom AI chips and networking offerings and massive contracts, including $21 billion worth orders from Anthropic (PC:ANTPQ) for Alphabet-owned Google’s (GOOGL) TPUs (tensor processing units) and the partnership with OpenAI to deploy 10 GW of AI processors. While AVGO delivered upbeat Q4 FY25 results, shares fell after the earnings call as the chip company warned of margin pressures from growing sales of lower-margin custom AI processors.

Shares have also been under pressure due to investor concerns about valuations of AI stocks and increased scrutiny of the returns on massive AI spending. Nonetheless, AVGO stock is still up 47% year-to-date despite the recent pullback.  

Several analysts remain bullish on Broadcom stock, given solid demand for its custom AI ASICs (application-specific integrated circuits) and strong backlog.

Is AVGO a Good Stock to Buy?

Following an investor meeting with management, UBS analyst Timothy Arcuri increased the price target for Broadcom stock to $475 from $472 and reiterated a Buy rating. The 5-star analyst thinks that the post-earnings selloff on December 12 was a “significant overreaction by the market.” In fact, Arcuri raised his estimates based on management’s commentary on AI chip revenue for Fiscal 2026, which he now estimates to be more than $60 billion, or up nearly three times year-over-year.

Among the key takeaways, Arcuri noted that management is very positive that the $73 billion AI backlog figure (over a period of 18 months) provided during the earnings call is “extremely conservative” and will be shipped in a timeframe closer to 12 months.

The analyst added that a year ago, Broadcom expected a $60 billion to $90 billion TAM (total addressable market) in 2027 (mainly based on training workloads) from three customers for XPUs and networking products. But that forecast no longer holds, given a surge in XPU demand to support rapid growth in AI inference and the increasing use of XPUs in AI LLM (large language model) labs. Accordingly, Arcuri raised his Fiscal 2027 top-line and EPS estimates to $135 billion (2% above consensus) and $14.15 (1.7% above consensus), respectively.

Overall, Broadcom scores Wall Street’s Strong Buy consensus rating based on 27 Buys and two Hold recommendations. The average AVGO stock price target of $455.63 indicates about 34% upside potential.

See more AVGO analyst ratings.

Conclusion

Wall Street is bullish on both AMD and Broadcom stocks, given strong AI-led growth prospects. Interestingly, TipRanks’ Smart Score System has assigned a “Perfect 10” score to both AMD and AVGO stocks, indicating that they have the potential to outperform the broader market over the long term. Currently, Wall Street’s average price target indicates slightly higher upside potential in AVGO stock than in AMD from current levels.