Will Broadcom’s stock to overtake Nvidia? Here’s what experts about the 2025 AI race

The race for dominance in the AI chip sector is heating up, with Broadcom Inc. emerging as a strong contender to rival Nvidia Corporation in the coming years. According to expert forecasts, tech giants like Microsoft, Meta, and Amazon are diversifying their AI chip supply chains, which could shift the power dynamics in this lucrative market.
A prediction made by fund manager Stephen Yiu, head of Blue Whale Growth Fund, suggests that by 2025, Broadcom could surpass Nvidia, the current leader in AI chips, in terms of growth potential.

Broadcom vs. Nvidia

As the demand for artificial intelligence (AI) capabilities skyrockets, Nvidia has long been the go-to supplier of graphics processing units (GPUs) for AI applications.

However, Yiu suggests that this could change as companies like Microsoft, Meta, and Google look beyond Nvidia’s dominance.

These companies, which have been significant purchasers of Nvidia’s powerful GPUs, are now shifting towards developing their own custom AI chips to reduce their dependency on a single supplier.
Broadcom, with its strategic partnerships and innovative chip solutions, is emerging as a potential challenger to Nvidia’s reign.
Yiu, who has decreased his fund’s investment in Nvidia while increasing his stake in Broadcom, believes that the latter’s strong collaborations with major tech firms position it for superior growth in the AI chip market.
According to him, Broadcom’s lower price point and strong customer base provide it with a competitive edge.

Broadcom’s Strong Growth and Market Potential

Broadcom’s performance has been nothing short of impressive in 2024, with the company’s stock up by over 103% year-to-date as of December 2024.

The company’s market capitalization recently surpassed $1 trillion, driven in part by its AI revenue, which tripled to $12.2 billion.

Broadcom’s AI chips are being developed in collaboration with key players such as Meta, Alphabet, and ByteDance, signaling the company’s rising influence in the AI chip space.

Yiu’s prediction stems from Broadcom’s ability to scale rapidly despite its current market size.

While Nvidia’s growth potential remains significant, Yiu notes that it would need to add another $1.5 trillion to its market value to achieve the same percentage growth that Broadcom could see by growing from $1 trillion to $1.5 trillion.

This makes Broadcom a more attractive option for investors seeking substantial returns in the AI sector.

FAQs

Is Nvidia an IT company?

Nvidia Corporation is a technology firm renowned for designing and producing graphics processing units (GPUs).

Is NVIDIA bigger than Apple?

Nvidia surpassed Apple to become the world’s highest-valued company, reaching a market value of $3.53 trillion, fueled by a surge in demand for AI chips.