Top Semiconductor Stock Outpacing Nvidia With a 36% Gain Over 6 Months

Nvidia (NVDA +2.27%) is one of the most well-known stocks due to its AI chips. It has become the world’s most valuable publicly traded company, but that doesn’t make it the best stock to hold.

Fellow semiconductor stock Broadcom (AVGO +1.71%) has outperformed Nvidia with a 36% return over the past six months. The shift to custom-made chips may explain why Broadcom is doing so well and leaving Nvidia shares behind.

Image source: Getty Images.

ASIC chips are poised to gain market share

Broadcom produces ASIC chips while Nvidia specializes in GPUs. Nvidia’s AI chips can handle a wide range of general tasks, but Broadcom’s chips are specialized for specific tasks.

Today’s Change

(1.71%) $7.20

Current Price

$427.76

Key Data Points

Market Cap

$2.0TMarket cap calculated using publicly traded shares outstanding only. Does not include unlisted, private, or dual-class non-traded shares. Implied market cap may vary.

Day’s Range

$421.61 – $430.84

52wk Range

$281.87 – $495.00

Volume

14.7M

Avg Vol

25.9M

Gross Margin

65.66%

Dividend Yield

0.59%

Many tech giants have Broadcom create custom chips for them. Alphabet’s TPU chips and Meta Platforms‘ MTIA chips are designed by Broadcom, and the AI chipmaker also counts Microsoft and Amazon as top customers.

ASIC chips are becoming increasingly important due to AI inference. Their energy efficiency and low latency give them an edge for this type of AI.

Granted, data centers will still need GPUs and ASICs. ASICs like the ones Broadcom provides can do any one thing better than a GPU, but a GPU can accomplish a wide range of tasks.

Broadcom’s earnings demonstrate why it is the leading ASIC producer

Broadcom and Nvidia compare in the broader AI chip market, but Broadcom is in a class of its own when it comes to ASICs. The company recently delivered 48% year-over-year revenue growth in its fiscal 2026 second quarter, with net income almost doubling year over year.

Artificial intelligence is driving most of the momentum, which sets the stage for accelerated revenue growth in future quarters. Broadcom’s AI semiconductor segment grew by 143% year over year and makes up almost half of total revenue.

That’s a faster growth rate than Nvidia’s data center revenue, which was up by 92% year over year in its fiscal 2027 first quarter. Even though Nvidia has higher overall revenue growth rates, Broadcom is gaining market share at a faster rate in the critical AI chip industry.

Broadcom CEO Hock Tan even told investors to expect AI semiconductor revenue to surge by more than 200% in its fiscal 2026 third quarter.

It’s expecting $16 billion in AI semiconductor revenue and $29 billion in overall revenue in that quarter. That would put the company at 84% year-over-year revenue growth. The forecast represents a meaningful improvement and high sequential growth while making AI semiconductor revenue more central to future results. These factors suggest Broadcom can continue to outperform Nvidia.