Why Analysts Call Broadcom a 'Magnificent Eight' Stock That Can Challenge Nvidia

Core Viewpoint - Broadcom's strong quarterly earnings indicate potential competition for Nvidia, with analysts suggesting a possible $12 billion impact on Nvidia's 2026 sales due to Broadcom's growing AI chip demand and new customers [2]. Group 1: Broadcom's Performance - Broadcom reported record quarterly sales driven by strong demand for its AI offerings, with speculation that a significant new customer could be OpenAI [2]. - Broadcom's stock rose over 3% following its earnings report, contributing to a nearly 10% increase from the previous Friday [3]. Group 2: Market Impact on Nvidia - Citi analysts have reduced Nvidia's target price from $210 to $200, citing concerns over Broadcom's potential to capture market share from Nvidia [2]. - Analysts predict that Nvidia's share of the AI compute market will decline over time, with Broadcom expected to gain approximately 30% and AMD at least 10% [4]. Group 3: Future Projections - Melius Research analysts maintain bullish targets for both Nvidia ($240) and Broadcom ($415), suggesting both companies will benefit from the expanding AI computing market [5]. - If Broadcom captures 20% of a projected $2 trillion market by 2030, while Nvidia retains a 40% share (down from over 70%), both stocks could see significant increases in value [6][8].