I’m Buying Broadcom This Week For One Powerful Reason
Every hyperscaler building AI infrastructure eventually needs a partner that can do something NVIDIA simply will not, and one company quietly collects every time that phone rings.
Coverage ended
4 updates · Last at 2:40pm ET
NVIDIA Live Thursday Updates: Jensen Huang May End $100B OpenAI Investment
Live Updates
Newest firstNVIDIA Shares Are Down 1.6% in Afternoon Trading While Consumer Staples Sink
Today has turned into a route across the market. Interestingly, tech isn’t leading the sell-off.
NVIDIA is down about 1.6% while rivial Broadcom (Nasdaq: AVGO) is one of the few semiconductor stocks up in afternoon trading. Investors are rotating into software, with Salesforce up 5%, ServiceNow up 6.3%, and CrowdStrike up 3.7%
Sectors that had seen buying in recent ‘flight to safety days’ like consumer staples and healthcare are getting pounded. Walmart is down 4.3%, GE Aerospace is down 4.4%, and Eli Lilly is down 3.1%
That’s the story of the market today, a rotation back into software stocks that have taken a beating in early 2026 and way from stocks investors have piled into in industries that were seen as ‘safe’ from AI disruption.
NVIDIA Receives Upgrade to Price Target of $360 from Tigress Financial Partners
Tigress Financial Partners upgraded NVIDIA to a price target of $360. The researcher reiterated a Strong Buy rating on the company with upside of 98% from where the stock trades for today.
The main points Tigress made was that the company’s GPU cadence is fueling an AI flywheel and visibility of AI infrastructure buildout through 2030.
NVIDIA shares are now trading slightly positive on the day as of 11:30 a.m. ET.
NVIDIA Shares Down Slightly in Early Trading
NVIDIA opened down about 1% but has climbed some since the open and is now down .6% as of 10:10 a.m. ET.
Today is a relatively sleepy market day. Software and infrastructure is outperforming overall while the VanEck Semiconductor ETF is up .2%, with Broadcom contributing most of the gains.
Here's How AI Stocks are Trading Premarket Today
Here’s a look at AI stocks in premarket trading as of 8:40 a.m. ET.
- NVIDIA (NVDA): Down .74% amidst a general Nasdaq decline. The stock might also be trending down after Broadcom’s bullish 2027 guidance confirmed deep engagement with many customers.
- Broadcom (AVGO): Up 5% premarket after issuing strong earnings guidance and guiding toward strong demand across customers in 2027.
- Lumentum (LITE): A company NVIDIA invested in earlier this week that’s now dropping after quotes from Broadcom that pushed off broad co-packaged optics (CPO) deployment until 2028. Coherent (COHR) is also dropping after Broadcom’s call.
Live coverage has ended. The full story is below.
Full Coverage
The story so farNVIDIA (Nasdaq: NVDA) shares are down .56% in premarket trading on Thursday. We’ll be tracking the stock’s movements in this live blog, but two big stories are dominating so far this morning. First, NVIDIA CEO Jensen Huang said at a conference last night the company’s $100 billion OpenAI deal is ‘probably not in the cards.’
Second, chief NVIDIA rival Broadcom reported earnings last night. We were live-blogging the event, and I was stunned how much Broadcom CEO Hock Tan was going all-in on revealing bullish future news. He came into the earnings with a clear intent: proving that Broadcom had extremely strong demand for 2027, and remains NVIDIA’s number one competitive threat.
Let’s dive into each major news story!
Jensen Huang Steps Back From OpenAI Investments
The headline this morning is that Jensen Huang suggested NVIDIA would likely not proceed with a previously discussed $100 billion investment in OpenAI, and that the company intends to curtail future investments in AI frontier model companies like OpenAI and Anthropic.
That is worth pausing on. Back in Q3 FY2026, NVIDIA had announced a strategic partnership with OpenAI to “deploy at least 10 gigawatts of NVIDIA systems for next-generation AI infrastructure.” That deal positioned NVIDIA not just as a chip supplier, but as a capital partner in the AI buildout. NVIDIA recently invested in OpenAI at a smaller amount, but walking back the full terms of their partnership is notable.
At the end of the day, concerns that NVIDIA has been creating ‘circular funding’ for AI companies has weighed on the company’s stock. Bears have pointed to these deals and compared them to what happened during the Dot-Com bust with fiber companies like Nortel providing ‘vendor financing’ that later blew up. NVIDIA likely wants to tamp down on these accusations, and there’s plenty of capital available for leading frontier model companies. OpenAI just closed a $110 million round (NVIDIA ivnested $30 billion in it), and Anthropic’s recent rounds have been oversubscribed.
I wouldn’t expect this to signal an end to NVIDIA’s investment activity. After all, it was just a couple days ago the company invested $4 billion between Lumentum (Nasdaq: LITE) and Coherent (Nasdaq: COHR). Rather, Huang’s quotes signal NVIDIA will focus on more strategic deals across its supply chain rather than writing the massive checks model companies require.
Broadcom Surges on AI Demand Guidance
Meanwhile, NVIDIA’s closest rival in the AI chip race is having a very good morning. Broadcom (AVGO) is up 6.5% in premarket trading after reporting strong Q1 FY2026 results last night. AI semiconductor revenue came in at $8.4 billion, up 106% year over year, and the company guided for $10.7 billion in AI semiconductor revenue in Q2. CEO Hock Tan put it plainly on the earnings call:
“Our AI revenue growth is accelerating, and we expect AI semiconductor revenue to be $10.7 billion in Q2.”
Hock Tan, Broadcom CEO, Q1 FY2026 Earnings Call, March 4, 2026
Broadcom also hinted at strong demand visibility into 2027, with AI chip demand trending toward roughly 10 gigawatts of capacity. For context on the full earnings picture, our team covered the setup and results in detail here.
Broadcom’s surge is a double-edged signal for NVIDIA investors. On one hand, it validates that AI infrastructure spending is real, durable, and accelerating. On the other hand, Broadcom is not just a passive beneficiary here. It is actively taking share in custom AI accelerators, and its hyperscaler relationships are deepening every quarter.
Broadcom CEO Hock Tan went to pains to describe their relationship with each hyperscaler and major customer, including noting they expect to deliver 3 gigawatts worth of inventory to Anthropic next year. Clearly, Broadcom remains NVIDIA’s number one rival.
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Eric Bleeker
Eric Bleeker has been investing for more than 20 years. He began his career working at Microsoft before joining Motley Fool, one of the largest publishers of financial research. In his 15 years at Motley Fool Eric served as the General Manager for Fool.com and led coverage in the Technology & Telecom sector. In addition, he was a featured columnist and has hosted dozens of investing seminars attended by more than a million total investors. Eric has more than 1,000 financial bylines to his name and has been featured in The Wall Street Journal, CNBC, Fox Business, and many other leading publications. He is currently focused on artificial intelligence investing and is a CFA Charterholoder.
