Why Broadcom Is Breaking Down as Nvidia Nears New Highs

$Broadcom (AVGO.US)$ and $NVIDIA (NVDA.US)$ are trading very differently into the next leg of the AI cycle.

AVGO closed at $357.16 on September 3, down 2.7% on the day and roughly 28% below its June high of $495. NVDA closed at $228.45, only about 3% below its 52-week high of $236.54.

The divergence comes despite one of Broadcom’s strongest AI outlooks yet.

Broadcom’s AI roadmap keeps getting bigger

Broadcom’s latest AI semiconductor revenue reached about $16.7B, up 221% YoY, ahead of consensus. Next-quarter AI revenue is expected to reach $21.7B, taking FY26 AI revenue to roughly $58B.

FY27 would nearly double again, followed by another doubling in FY28. Bernstein estimates underlying demand at about 10GW in FY27 and 20GW in FY28.

The bigger numbers sit further out:

But the revenue mix is changing. AI semiconductors carry lower gross margins than software, with Broadcom guiding consolidated gross margin down toward roughly 73% next quarter as AI becomes a larger share of revenue.

The ASIC boom is also getting more competitive

Broadcom remains one of the largest beneficiaries of custom AI accelerators, but rising ASIC penetration does not guarantee stable Broadcom market share.

The competition now has two layers:

GPU vs. custom ASIC, where Broadcom benefits as hyperscalers build more internal accelerators; and Broadcom vs. other ASIC suppliers, where MediaTek, Marvell and others are competing for individual programs and sockets.

That second battle is becoming more relevant as customers increasingly use multiple design partners.

Broadcom’s forward growth is also becoming more exposed to a handful of frontier labs. Bernstein expects Anthropic and OpenAI to represent roughly 15GW of Broadcom’s 20GW FY28 demand under its current assumptions. The firm remains bullish, but lowered its valuation multiple from 25x to 23x partly because of greater exposure to cash-intensive frontier AI companies.

NVDA has the opposite customer profile.

J.P. Morgan says Nvidia is comfortable with roughly 70% YoY FY28 growth, supported by hyperscalers, neoclouds, AI labs, sovereign AI and enterprise demand.

OpenAI and Anthropic together account for roughly 20% of Nvidia’s end demand today, potentially reaching about 25% in FY28. Neocloud demand has also become material.

ASICs remain a real long-term threat to Nvidia. J.P. Morgan expects GPU and ASIC/XPU share of AI compute to move closer toward parity over time. Nvidia’s advantage remains its integrated chip, rack and software stack, alongside a broader set of end customers and workloads.

AVGO now needs to reclaim the trend

Broadcom’s technical setup has weakened sharply.

At $357.16, AVGO is below all of its main medium- and long-term moving averages:

The first resistance area is $361–364, followed by $370. The more important trend test is the $378–386 area, covering the 200-day EMA and 200-day SMA. A failure to reclaim that zone keeps the longer-term trend under pressure.

NVDA is in a much stronger position. At $228.45, it is above its 20-, 50- and 200-day moving averages and remains close to its $236.54 high.

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