Broadcom Jumped as Nvidia Fell. This Is What Has Investors Excited.

Nvidia (NASDAQ:NVDA) has had a rough few days thanks to news breaking about its CEO. However, Broadcom (NASDAQ:AVGO) could be in a strong position to capitalize on it, and the market has already made its opinion known about this potential. Since November began, the S&P 500 is flat. However, Broadcom is up nearly 6%, and Nvidia is down around 21%. I think this suggests market sentiment toward Broadcom's stock could be shifting, and now may be the perfect time to buy shares. Missed Nvidia in 2009? This Rare Signal Is Flashing Again. In 2009, a "Double Down" signal flashed for a little-known chipmaker called Nvidia. For the first time in years, that same "Total Conviction" signal is flashing for a company 1/100th the size of Nvidia. Continue " Image source: Getty Images. Broadcom is a major Nvidia competitor Broadcom is taking a different approach to the AI computing world than Nvidia is. While Nvidia's GPUs are recognized as best-in-class and can handle practically any AI computation, the reality is that they're not specialized for anything and aren't the most cost-efficient. Many GPUs run the same workload throughout their entire lifespan, and that's wasted potential. Broadcom's solution to this problem is to collaborate with AI hyperscalers and design computing units specifically tailored to the workloads that they see. This provides a far more optimized computing unit that delivers the best cost performance in many cases. However, they cannot be used for everything. So, the future likely will be some combination of custom AI units and GPUs, but if something happens to Nvidia, you may see a greater shift toward custom AI chips from Broadcom. It's already growing incredibly fast, with its AI semiconductor divisions growing at 221% during its most recent quarter. Next year, the company expects this division to double its revenue, then double it again in 2028. That's a huge projection, and it shows that AI hyperscalers are increasingly considering custom AI chips. However, not a ton of success is priced into Broadcom's stock right now. Broadcom trades at just 17 times fiscal year (FY) 2027 earnings and 10.9 times FY 2028 earnings. AVGO PE Ratio (Forward 1y) data by YCharts That's a great price to pay for a stock that has a lot to gain over the next few years. With the stock barely outperforming its peers, I think investors aren't too late to scoop up Broadcom shares while they're still cheap. With Nvidia stock in limbo, Broadcom may be able to step in and fill the void, becoming the leader of the AI investment trend. I think it's a great stock pick both to end 2026 and into 2027, and it now looks like the perfect time to buy. Should you buy stock in Broadcom right now? Before you buy stock in Broadcom, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now... and Broadcom wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $335,171!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $1,000,640!* Now, it's worth noting Stock Advisor's total average return is 823% -- a market-crushing outperformance compared to 208% for the S&P 500. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built by individual investors for individual investors.

Broadcom Jumped as Nvidia Fell. This Is What Has Investors Excited.

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