Should You Forget Nvidia and Buy This Artificial Intelligence (AI) Stock Right Now?

Core Viewpoint - Nvidia has shown exceptional growth in AI revenue, with shares increasing over 2,500% in the past five years and projected to rise more than 160% in 2024, but Broadcom may present a compelling alternative investment opportunity in the AI sector [1][5]. Group 1: Nvidia's Performance - Nvidia has consistently delivered triple-digit earnings growth, leading to significant stock appreciation [1]. - The company's current valuation stands at 46 times forward earnings estimates, which is considered reasonable given its growth trajectory [5]. Group 2: Broadcom's AI Growth - Broadcom reported a 47% increase in revenue to over $13 billion, driven by demand from hyperscalers for AI networking and custom accelerators [2]. - Custom AI accelerators have more than tripled year-over-year, while Ethernet switching grew fourfold, and optical components increased threefold [2]. - Broadcom anticipates AI revenue to reach $3.5 billion in Q4 and $12 billion for the year, up from an earlier forecast of $11 billion [3]. Group 3: VMWare Acquisition - The acquisition of VMWare is expected to be a significant growth driver, with recent bookings contributing to an annualized booking value of $2.5 billion, a 32% increase from the previous quarter [4]. - Broadcom is on track to meet or exceed its profitability goals for VMWare, aiming for adjusted EBITDA of $8.5 billion by the 2025 fiscal year [5]. Group 4: Investment Considerations - While Nvidia remains a strong performer, Broadcom's stock appears cheaper and offers a solid growth narrative, making it an attractive option for investors looking to capitalize on the early stages of AI growth [6].