Broadcom’s Numbers Weren’t Perfect, But They Were Exactly What Nvidia’s Stock Needed

Nvidia stock (NVDA) nudged higher Friday morning, and it wasn’t because of anything Nvidia did. The real catalyst? Broadcom’s (AVGO) earnings.

The chipmaker reported a beat-and-raise quarter after Thursday’s close — exceeding both earnings and revenue estimates, while forecasting that AI-related revenue will jump 60% this year. That’s the kind of figure Wall Street watches closely, not just to value Broadcom but to take the temperature of the entire AI hardware market.

So even though Broadcom shares dropped on slightly overcooked expectations, Nvidia stock edged up, along with AMD, Intel, and Qualcomm. Why? Because Broadcom’s report confirms what investors care most about: AI spending isn’t slowing down.

AI Demand Is Fueling the Entire Chip Sector — Here’s Why

To understand the reaction, it helps to know how this sector works.

Companies like Nvidia and Broadcom don’t sell directly to you or me. They sell to cloud giants like Amazon (AMZN) and Microsoft (MSFT), enterprise customers, and infrastructure providers. These firms are racing to build out their AI capabilities, and that requires huge investments in advanced chips.

Those chips aren’t interchangeable. Nvidia dominates in training large AI models with its powerful GPUs. Broadcom, on the other hand, builds networking hardware, custom silicon, and accelerator chips — the infrastructure that supports those same models. So when Broadcom says AI revenue is growing fast, it strongly suggests that Nvidia’s customers are also ramping up investment.

In economics terms, it’s a complementary demand effect: spending on one part of the AI stack drives spending on others.

Why Nvidia Rises When Broadcom Drops

So why is Broadcom down nearly 4%, while Nvidia is up?

That’s about valuation. Broadcom came in solid, but investors were hoping for something blowout to justify its premium price. When a stock is priced for perfection, even “really good” sometimes isn’t enough.

But for Nvidia, the takeaway is different. It’s a signal that AI demand is real, ongoing, and deeper than any one company. That supports Nvidia’s broader growth story and justifies why it’s still the most valuable chipmaker in the world.

The takeaway here isn’t about Broadcom’s quarter. It’s that AI infrastructure buildouts are still accelerating, which keeps the long-term thesis for Nvidia intact. When AI investment is accelerating, investors look for the company that floats highest — and that’s still Nvidia.

Investors can compare Nvidia and Broadcom side-by-side using the TipRanks Stocks Comparison Tool.