Broadcom or Palantir: Analysts Pick the Superior AI Stock to Buy

AI is the current big deal in tech, with AI systems and their associated hardware systems at the leading edge of gains in the overall tech field, and the financial potential here is enormous.

Globally, the AI market was estimated at $233.5 billion last year and is expected to hit as high as $294 billion this year. Looking ahead, Fortune Business Insights is predicting a CAGR of 29.2% over the next several years and is projecting that the AI market will be worth over $1.77 trillion by 2032.

Gains on that scale are going to attract a lot of interest from both analysts and investors. The key to success won’t just be buying up all of the AI stocks, though; rather, investors should focus their resources on the right AI stocks – the ones with the highest potential for gains. Wall Street’s analysts are busy sifting through the market leaders to find those potential winners.

Two major names that are attracting analyst attention are Broadcom (NASDAQ:AVGO) and Palantir (NASDAQ:PLTR). Both companies have seen their successes pile up, but their outlooks are diverging. Let’s give them a closer look and see which one the analysts have picked as the superior AI stock to buy in today’s market.

Broadcom

We’ll start with a semiconductor chip company, Broadcom. The link with AI is clear – the chip companies provide the basic processor units, the ‘brains,’ that support AI infrastructure and applications. And Broadcom is one of the leaders in the chip industry. Its $57 billion in annual revenue ranks it as the fourth-largest chip company on the world scene, while its $1.7 trillion market cap puts it in second place.

Although Broadcom built its reputation on a wide range of high-end tech hardware – from cable modems to advanced fiber optics – its recent momentum has been fueled by AI demand. Today, its standout offerings include ASICs, or application-specific integrated circuits, which sit at the heart of both AI and cloud computing.

ASICs are a vital technology because they can be custom-designed to a buyer’s needs, delivering faster processing speeds while consuming less power. In energy-intensive areas such as AI, data centers, and cloud platforms, that combination of speed and efficiency is crucial. Broadcom has leveraged this advantage to cement its role in the global supply chain, supplying hyperscale server stacks, high-speed networking systems, and continuing to invest heavily in next-generation AI-capable hardware.

That positioning explains why Broadcom has become a go-to partner for major AI players. Its ability to deliver ASIC chips at scale was recently validated by a landmark $10 billion order from OpenAI, the company behind ChatGPT.

The financial impact is already visible. In its fiscal 3Q25, Broadcom posted revenue of $15.95 billion, up 22% year-over-year and $130 million ahead of expectations. EPS also came in slightly above forecasts, while free cash flow reached a hefty $7.02 billion.

For Macquarie’s Arthur Lai, the key point here is Broadcom’s fast growth in ASIC. The analyst writes of the company: “AI ASIC is growing faster than GPU, as detailed in our latest Ecosystem AI Accelerator race report. Broadcom is well positioned as the premier growth story in ASIC and infrastructure software, underpinned by management execution led by CEO Hock Tan, industry-leading SerDes IP, disciplined M&A, high-margin software expansion, and superior shareholder returns, including higher dividend growth and yield than peers.”

Lai follows this up with an Outperform (i.e., Buy) rating on AVGO stock and a $420 price target that points toward a one-year upside of 16.5%.

Wall Street as a whole is similarly bullish. Out of 29 recent analyst reviews, 27 are Buys, giving Broadcom a Strong Buy consensus. (See AVGO stock forecast)

Palantir

Next on analysts’ radar screens is Palantir, another of the major AI companies on the global scene. Palantir was founded in 2003, and quickly made a name for itself as a leader in the field of data analysis. The company was an early leader in adapting AI to data analytics, and its flagship product is dubbed the AIP, or AI Platform. The AIP provides users with a variety of tools with a wide applicability in multiple fields, a feature that has made Palantir and its services popular in both the public and private sectors.

Palantir has built its reputation on a successful matching of AI technology with human flexibility and intuition, a combination that enhances the company’s data analysis capabilities. Its platforms also make use of AI in the user interface, permitting users to enter queries and read out responses in natural language; the platform is intended to be easy to use and easy to understand. In addition to the AI-powered natural language interface, the platform can also handle real-time translations, making Palantir’s products amenable to international use and letting users around the world interact with the system in their own native languages.

Palantir has been singularly successful in acquiring large-scale customers, from industry and government. Just this month, Palantir’s new contract announcements include: an agreement with the AI network company, Lumen, for Lumen to use the Palantir Foundry and AIP products; a five-year expansion of an existing partnership with Lear, a global company in the automotive seating segment, for use of the Palantir Warp Speed and AIP products; and an agreement with the UK defense contractor Hadean for use of the Palantir Foundry software.

This company has been making waves in recent years, in part for the spectacular rise in its share value. PLTR shares have gained 121% just in 2025, and an impressive 359% over the past 12 months, pushing the 5-year gain to more than 1,500%. Yet, it’s precisely this meteoric rise that has sparked worries the stock may now be heavily overvalued.

The gains, however, rest on a solid foundation, driven by Palantir’s consistently strong financial performance. In 2Q25, the most recently reported quarter, the company’s revenue topped $1 billion for the first time, reflecting 48% year-over-year growth and surpassing forecasts by $64 million. Profitability followed the same trajectory, with non-GAAP EPS coming in at $0.16 per share, 2 cents ahead of expectations. Free cash flow hit $569 million, while cash and cash equivalents rose to $6 billion. Strength wasn’t limited to the balance sheet, as Palantir also reported a 43% year-over-year jump in its customer count.

For Mizuho analyst Gregg Moskowitz, Palantir’s story is one of exceptional execution paired with lofty valuation.

“PLTR’s recent execution has been stunning, with material upward revisions across both Commercial and Government. That said, the stock’s multiple remains extreme, dramatically above anything else in software. While the shares could suddenly be subject to material multiple reversion at some point over the next few quarters, PLTR’s uniqueness also demands tremendous credit. And looking forward, we believe PLTR is increasingly well-positioned to benefit from long-term trends in AI, government digital transformation, and industrial modernization,” Moskowitz opined.

While Moskowitz is impressed by the company, the analyst still rates the stock as Neutral (i.e., Hold). His $165 price target implies that the shares will stay rangebound for the foreseeable future. (To watch Moskowitz’s track record, click here)

Overall, PLTR stock has a Hold (i.e., Neutral) rating from the analyst consensus, based on 20 recent reviews that include 5 Buys, 13 Holds, and 2 Sells. (See PLTR stock forecast)

With the data in, it’s clear that the Street’s analysts have picked out Broadcom as the better choice for investors looking to buy into AI.

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Disclaimer: The opinions expressed in this article are solely those of the featured analysts. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.