Investors looking beyond Nvidia (NVDA) are watching two other chip giants closely. AMD (AMD) and Broadcom (AVGO) are taking different paths into the AI race, but both stocks are trying to capture the same powerful trend. The question is which one has more room to run.
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AMD Pushes Into AI with Confidence
AMD has been climbing back into the mainstream with strong demand for its AI chips. Analysts point to the company’s traction in hyperscale data centers, where cloud providers are looking for alternatives to Nvidia’s GPUs. Truist’s William Stein recently upgraded AMD to a Buy rating and raised its target to $213, saying the company is finally turning its AI investments into real revenue growth.
To strengthen its case, AMD also announced a new $6 billion buyback program. That brings its total authorization close to $10 billion. Buybacks give a direct boost to earnings per share and show that management believes the stock is undervalued. It also signals confidence that AMD can keep competing in a market where margins are thin and competition is intense.
At the same time, AMD faces challenges. Nvidia’s dominance means AMD must prove it can deliver chips that meet both performance and software standards. But the combination of analyst upgrades, rising demand, and buyback support gives the stock a clear narrative heading into 2026.
Broadcom Builds on Custom AI Chip Power
Broadcom is approaching the AI boom from another angle. Instead of competing head-on with Nvidia in GPUs, Broadcom has built a strong position in custom AI chips designed for large enterprises. These chips allow tech giants to fine-tune AI hardware for their own platforms, and Broadcom has built its market share in this space.
The market has noticed. Analysts have raised price targets and credited Broadcom’s exposure to this custom chip business as a key reason for its strength. While the stock trades at a higher valuation than AMD, investors are willing to pay a premium for Broadcom’s stability and predictable revenue streams.
There’s also momentum in networking hardware, which is becoming just as important as GPUs in scaling up AI systems. Broadcom’s ability to sell into multiple parts of the AI build-out, from chips to networking, makes it a central player in the infrastructure boom.
Analysts Weigh Growth and Risk
The two stocks offer very different profiles. AMD is seen as a faster-growing story. Wall Street expects earnings to jump nearly 40 percent in 2025 as its AI chips gain share. This upside comes with risk because the company is still fighting for market presence and faces constant pricing pressure.
Broadcom, by contrast, offers steadier growth but at a higher price. Its valuation is richer, reflecting the company’s established position in enterprise markets. Still, its focus on custom AI processors and networking gives it a moat that AMD does not yet have. Investors see it as a more defensive way to play AI without betting everything on GPU battles.
For investors, it comes down to appetite for risk and style. AMD may deliver faster returns if its AI chips gain adoption quickly. Broadcom may reward patience with steadier, more enterprise-driven growth. Either way, both names are now firmly part of the conversation about who will build the next layer of the AI economy.
Investors can compare both stocks based on analyst ratings and various financial metrics on the TipRanks Stocks Comparison Tool. Click on the image below to explore the tool.
