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<\/a> Image source: Getty Images. <\/p>\nMissed Nvidia in 2009? This Rare Signal Is Flashing Again.\u00a0In 2009, a “Double Down” signal flashed for a little-known chipmaker called Nvidia.\u00a0For the first time in years, that same “Total Conviction” signal is flashing for a company 1\/100th the size of Nvidia.\u00a0Continue \u00bb<\/a> <\/p>\n Broadcom has a major catalyst arriving in 2027 <\/p>\n Nvidia became the world’s largest company thanks to extreme demand for its graphics processing units (GPUs). Nvidia’s GPUs are widely recognized<\/a> as best in class, and their performance is further boosted by Nvidia’s ecosystem, which includes software and networking solutions. Nvidia’s products are utilized by every AI hyperscaler and have become the industry standard for AI training and inference. <\/p>\n However, in specific applications, most of a GPU’s wide-ranging capabilities are wasted. So, some AI hyperscalers are developing custom AI chips that are suitable only for narrow workloads. However, the AI hyperscalers don’t have the expertise necessary to design and manufacture computing chips. To solve that issue, they’ve partnered with companies like Broadcom, which are using their networking-world design expertise to develop optimized AI chips for clients. These chips are known as ASICs — application-specific integrated circuits. ASICs are nothing new, but they’ve only recently been deployed in AI settings to optimize performance. <\/p>\n In this context, ASICs are often referred to as custom AI chips, and there are a handful of examples of their success. Broadcom’s largest client has been Alphabet (NASDAQ: GOOG) (NASDAQ: GOOGL), which partnered with Broadcom to design the Tensor Processing Unit (TPU). TPUs are widely recognized as a strong competitor to Nvidia’s products, and Alphabet is also starting to sell TPUs directly to certain clients because they are more cost effective than GPUs in the right applications. <\/p>\n Alphabet’s success with TPUs has inspired other AI companies to partner with Broadcom to launch their own chips, and most of these products are now reaching production. Broadcom expects to realize over $100 billion in AI semiconductor sales next year, fueled by new orders. For reference, Broadcom’s AI semiconductor revenue during the second quarter was $10.8 billion — just over $40 billion annualized. That’s a lot of growth coming up in the next year, but does that make it a better bargain than Nvidia? <\/p>\n Story Continues <\/p>\n Broadcom stock can look pricey or cheap, depending on how you frame it <\/p>\n At first glance, Broadcom looks far more expensive than Nvidia from a forward price-to-earnings (P\/E) ratio standpoint. <\/p>\n However, that doesn’t do Broadcom justice, as most of its growth is expected next year. Compare the stock price to next year’s earnings estimates, and the gap closes. <\/p>\n Still, Nvidia is slightly cheaper than Broadcom. So, which makes the most sense to invest in? <\/p>\n I’d say Nvidia. While I love Broadcom’s growth story, the reality is that Nvidia’s stock is priced much more cheaply. Furthermore, the analyst community isn’t giving Nvidia the benefit of the doubt next year and is forecasting pretty slow growth compared to its peers. (They expect Nvidia to grow at a 43% pace.) Additionally, if one of Broadcom’s clients falls through on its purchase commitments, it could shift Broadcom’s 2027 outlook. <\/p>\n There is execution risk associated with Broadcom’s stock that doesn’t exist with Nvidia. If anything, Nvidia is being underprojected next year, while Broadcom is being overprojected. That leaves more room for error with Nvidia, and even though I like both stocks<\/a> and own both, Nvidia makes for the better purchase today. <\/p>\n Should you buy stock in Broadcom right now? <\/p>\n Before you buy stock in Broadcom, consider this: <\/p>\n The Motley Fool Stock Advisor analyst team just identified what they believe are the\u00a010 best stocks<\/a> for investors to buy now\u2026 and Broadcom wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years. <\/p>\n Consider when Netflix made this list on December 17, 2004… if you invested $1,000 at the time of our recommendation,\u00a0you’d have $409,970!* Or when Nvidia made this list on April 15, 2005… if you invested $1,000 at the time of our recommendation, you’d have $1,381,040!* <\/p>\n Now, it’s worth noting\u00a0Stock Advisor’s total average return is 969% \u2014 a market-crushing outperformance compared to 215% for the S&P 500.\u00a0Don’t miss the latest top 10 list, available with\u00a0Stock Advisor, and join an investing community built by individual investors for individual investors. <\/p>\n See the 10 stocks \u00bb<\/a> <\/p>\n *Stock Advisor returns as of August 18, 2026. <\/p>\n Keithen Drury<\/a> has positions in Alphabet, Broadcom, and Nvidia. The Motley Fool has positions in and recommends Alphabet, Broadcom, and Nvidia. The Motley Fool has a disclosure policy<\/a>. <\/p>\n