The Case for Broadcom Over Nvidia Strengthens in September
Both Broadcom and NVIDIA just posted blowout AI quarters, yet rising Treasury yields and compressing multiples are forcing investors to pick sides. The answer may surprise anyone still treating these two as interchangeable AI bets.
Broadcom (NASDAQ:AVGO | AVGO Price Prediction) and NVIDIA (NASDAQ:NVDA) both just posted blowout AI quarters, yet the September market treats them very differently. With the 10-year Treasury at 4.80% and big-tech multiples compressing, Broadcom’s custom-silicon story is quietly getting louder while NVIDIA’s dominance faces its first real cracks of doubt.
Custom Accelerators Steal the Spotlight From Merchant GPUs
Broadcom’s Q3 delivered $29.59 billion in revenue, up 85.5% year over year, with AI semiconductor revenue of $16.7 billion, up 221% year on year and 54% sequentially. XPUs, the custom chips Hock Tan builds for Google, Meta, OpenAI, and Anthropic, accounted for 73% of AI revenue. Tan told investors Broadcom has “line of sight for fiscal 2028 AI semiconductor revenue growth to again double to $230 billion”. That is a staggering forward map.
NVIDIA’s $96.22 billion quarter, up 105.8% year over year, is still the biggest number in semis. But management guided fiscal 2028 growth to approximately 70%, with Jensen Huang admitting NVIDIA is “supply constrained” and gross margins stepping down to 71% to 72% by Q4 on memory pricing. Inventory jumped to $32 billion for the Vera Rubin ramp, and DSOs stretched to 60 days.
One Bets on Bespoke Silicon, the Other on Full-Stack Reach
| Lens | Broadcom | NVIDIA |
| Core AI product | Custom XPUs plus Tomahawk Ethernet | Merchant GPUs, CUDA, NVLink |
| Forward P/E | 19 | 26 |
| 1-month price change | -13.74% | +2.81% |
| Key vulnerability | Six-customer concentration | China zeroed out, memory costs |
Tan’s pitch is blunt: “when you co-develop a chip that is optimized for your particular LLM workloads, you will outperform any GPU”. He claims Jalapeno, OpenAI’s first custom accelerator, hits comparable performance to Vera Rubin at half the cost of a GPU. Broadcom also layered on Infrastructure Software revenue of $8.75 billion, up 29% year over year, giving it an enterprise AI angle NVIDIA lacks.
Next Test Is Whether Yields Punish the Higher Multiple
With the 10-year at its 99.6 percentile and derisking underway, valuation matters more than growth theater. Broadcom trades near 19 times forward earnings against a $533.41 analyst target. NVIDIA sits at 26 times forward. I will watch whether Broadcom converts its Q4 $21.7 billion AI guide into that fiscal 2027 $115 billion promise, and whether NVIDIA’s Vera Rubin ramp restores gross margin discipline.
Why I Lean Broadcom Into Year-End
The setup favors Broadcom here. The stock has already absorbed a 13.74% one-month drawdown while NVIDIA held up, meaning valuation reset without a business reset. If you want the purest AI beta with $500 billion in financing partnerships and $5.4 trillion in market cap behind it, NVIDIA still wins. But for investors worried about rising yields squeezing premium multiples, Broadcom’s PEG near 0.4, VMware software cushion, and six-customer XPU backlog look like the cleaner risk-reward into 2027. I would need China compute reopening to flip back toward NVIDIA.
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Alex Sirois is a financial writer with experience spanning both retail and institutional investing. He has written for InvestorPlace and held roles at BNY Mellon and Bernstein, giving him a perspective that bridges Main Street portfolios and Wall Street analysis.
Alex holds an MBA from George Washington University and has built his career across multiple industries, including e-commerce, education, and translation — a breadth of experience that informs how he breaks down complex financial topics for everyday investors. His writing is conversational, actionable, and grounded in long-term, buy-and-hold investing principles.
At 247 Wall St., Alex focuses on delivering analysis that is both accessible and useful, with a clear emphasis on helping readers make more informed decisions with their money.
