Nvidia vs. Broadcom: Which Soaring Stock-Split AI Stock Is The Better Buy Now?

Group 1: Industry Overview - The generative artificial intelligence (AI) sector has rapidly grown since the launch of OpenAI's ChatGPT in late 2022, benefiting hardware companies like Nvidia and Broadcom that supply essential data center equipment [1] - The AI industry is projected to reach a value of $1.3 trillion by 2032, indicating significant growth potential [2] Group 2: Nvidia - Nvidia's stock has increased over 3,500% in five years, leading to frequent stock splits to maintain share price accessibility, with the latest being a 10-for-1 split effective June 7, bringing the price to around $120 per share [2] - Nvidia holds an 80% market share in advanced graphics processing units (GPUs) critical for large language models, positioning the company favorably for future demand [2] - First-quarter revenue for Nvidia surged 262% year over year to $26 billion, while net income rose 628% to $14.9 billion, reflecting strong financial performance [2] Group 3: Broadcom - Broadcom announced a 10-for-1 stock split expected to take effect on July 15, with a current stock price of $1,735 per share [4] - The company reported a 43% year-over-year revenue increase to $12.5 billion in the second quarter, driven by rising AI-related demand and the acquisition of VMware, which diversifies its revenue streams [5] - Broadcom specializes in custom chips tailored to specific workloads, making its products more cost- and energy-efficient compared to mass-market alternatives [5] Group 4: Valuation Comparison - Nvidia's forward price-to-earnings (P/E) multiple is 51, while Broadcom's is 37, indicating that Broadcom is more reasonably priced despite Nvidia's stronger growth prospects [6]