Concerns about elevated valuations of artificial intelligence (AI) stocks are impacting investor sentiment. However, analysts are bullish on several AI stocks as they believe that their valuations are justified by sound fundamentals and strong growth potential. Using TipRanks’ Stock Comparison Tool, we placed chip giant Broadcom (AVGO) against AI-powered data analytics company Palantir Technologies (PLTR) to find the better AI stock, according to analysts.
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Broadcom (NASDAQ:AVGO) Stock
Broadcom offers networking solutions and custom application-specific integrated circuits (ASICs), which are seeing robust demand amid the ongoing AI boom. Aside from major AI deals, the sentiment for AVGO stock has also been bolstered by the demand for Alphabet-owned (GOOGL) Google’s TPUs (tensor processing units), which are designed and produced by Broadcom.
Meanwhile, Broadcom is scheduled to announce its results for the fourth quarter of Fiscal 2025 on December 11. Wall Street expects Broadcom to report earnings per share (EPS) of $1.87, reflecting 32% year-over-year growth. Revenue is projected to increase by more than 24% to $17.5 billion. AVGO stock has risen 68.3% year-to-date.
Is AVGO a Good Stock to Buy?
Ahead of Broadcom’s Q4 FY25 earnings, Susquehanna analyst Christopher Rolland reiterated a Buy rating on AVGO stock and raised the price target to $450 from $400. The 5-star analyst expects better-than-expected results and outlook, fueled by upside for both custom ASICs and AI networking solutions. For custom chips, Rolland expects continued momentum, with Google recently launching its newest-gen chip, Google Ironwood (TPU v7). Rolland also highlighted AVGO’s announcement of $10 billion in AI rack orders (the analyst believes the customer is Anthropic), expected in the second half of Fiscal 2026.
Given this fourth customer and continued share gains across its three existing customers (Google, Meta Platforms (META), and ByteDance), Broadcom expects a significant jump in its Fiscal 2026 AI revenue forecast from the prior guidance of 60% growth. Consequently, Rolland expects Fiscal 2026 AI revenue to increase by 110% to about $42 billion. The analyst also noted Broadcom’s agreement with OpenAI (PC:OPAIQ) for about 10 GW of AI racks. Rolland expects about $10 billion of revenue per GW, with initial revenue in Q1 FY27. For AI Networking, the analyst pointed out that reports from Arista Networks (ANET) and Cisco (CSCO) reflect strong results.
The analyst cautioned that he expects Broadcom’s margins to remain under pressure in the longer term due to the mix of racks with gross margins below the corporate average. Overall, Rolland remains optimistic on Broadcom’s ASIC business and sees continued momentum from SUE (Scale-Up Ethernet).
With 23 Buys and two Holds, Wall Street has a Strong Buy consensus on Broadcom stock. The average AVGO stock price target of $425.13 indicates about 9% upside potential.
Palantir Technologies (NASDAQ:PLTR) Stock
Palantir stock has rallied 140% year-to-date despite valuation concerns. The company has consistently delivered strong growth, supported by solid demand for its Artificial Intelligence Platform (AIP) offering.
Growth has been impressive across PLTR’s commercial and government businesses. Interestingly, Q3 2025 marked the second time the company’s quarterly revenue exceeded $1 billion. Palantir raised its full-year guidance, reflecting continued momentum. While several analysts are impressed with the company’s performance, valuation remains a major concern. PLTR stock is trading at an elevated forward P/E (price-to-earnings) multiple of 251.09x, compared to the sector average of 24.4x.
Is Palantir Stock a Buy?
Following the Q3 print, Raymond James analyst Brian Gesuale reiterated a Hold rating on Palantir Technologies stock. The analyst noted that the company delivered “standout” Q3 results, driven by robust momentum in the U.S. Commercial business, solid execution in the U.S. Government business, and a sharp inflection in deal activity. Notably, the U.S. Commercial revenue jumped 121% year-over-year, marking the highest quarterly contribution yet, while the U.S. Government segment’s revenue grew 52%, driven by continued ramp of large defense programs.
Gesuale added that momentum is expected to continue, with Palantir closing a record number of large deals. He highlighted that Palantir reported the largest-ever U.S. Commercial total contract value at $1.31 billion (up 342% year-over-year), reflecting rising enterprise adoption of AIP. Despite all these positives, Gesuale remains sidelined on PLTR as he believes the stock is priced to perfection.
Currently, Wall Street has a Hold consensus rating on Palantir Technologies stock, based on 11 Holds, three Buys, and two Sell recommendations. The average PLTR stock price target of $183.07 indicates shares are fully priced at current levels.
Conclusion
Wall Street is bullish on Broadcom stock due to AI-led demand for its custom chips and networking offerings. However, most analysts are sidelined on Palantir stock due to valuation concerns. Wall Street sees downside risk in PLTR stock but continued upside in AVGO stock. Broadcom’s upcoming results will provide insights into the demand backdrop for its products.