Key Takeaways
- The stocks of Broadcom and AMD could have higher upside than Nvidia in the coming years due to their growing presence in the AI chip market.
- Broadcom’s ASIC technology and partnership with companies like Alphabet and OpenAI position it for explosive growth in the AI market.
- AMD’s success in the inference market and partnerships with companies like Oracle and OpenAI set it up for strong revenue growth in the future.
- Nvidia’s market share in the GPU space is expected to decline due to increased competition from Broadcom and AMD.
Introduction to the AI Chip Market
The artificial intelligence (AI) chip market is a rapidly growing industry, with Nvidia currently dominating the space. However, as the market continues to evolve, other companies like Broadcom and AMD are emerging as potential threats to Nvidia’s market share. As stated in the article, "Nvidia’s market share has nowhere to go but down." This is because companies are increasingly looking for alternative solutions to Nvidia’s GPUs, which are expensive and power-hungry.
The Rise of Broadcom
Broadcom is a leader in ASIC technology, which provides customers with the building blocks to create their own custom chips. As the article notes, "Broadcom helped Alphabet design its highly successful tensor processing units (TPUs), and it continues to participate in their success." This partnership has been highly successful, and other companies like OpenAI are now turning to Broadcom for help in designing their own custom AI chips. According to the article, "Analysts at Citigroup see Broadcom’s AI revenue surging to surpass $50 billion this fiscal year and $100 billion in fiscal 2027." This type of growth sets Broadcom stock up to be a huge potential winner in the coming years.
AMD’s Growing Presence in the Inference Market
AMD, on the other hand, has found success in the inference market, where Nvidia’s moat is not as wide. As the article states, "AMD has already signed big data center deals with both Oracle and OpenAI." These partnerships are expected to drive strong revenue growth for AMD in the future. The article notes that "Oracle will deploy 50,000 AMD GPUs beginning in the second half of this year, with the cloud computing provider specifically saying they would be used for inference." Additionally, OpenAI has formed a partnership with AMD, taking an up to 10% stake in the company, and will deploy 6 gigawatts of its GPUs in the coming years.
Nvidia’s Declining Market Share
Nvidia’s market share in the GPU space is expected to decline due to increased competition from Broadcom and AMD. As the article notes, "Nvidia’s GPUs were once disrupted by ASICs in the cryptocurrency market, and companies are now increasingly looking toward these pre-programmed chips as a cheaper alternative to Nvidia’s GPUs to help power some of their AI workloads." This shift towards ASICs is expected to continue, with Broadcom and AMD being the main beneficiaries. As the article states, "While Nvidia still has a bright outlook, let’s look at two alternative AI chip stocks that could have even bigger upside."
Conclusion and Future Outlook
In conclusion, the AI chip market is a rapidly evolving industry, with Nvidia’s market share expected to decline due to increased competition from Broadcom and AMD. As the article notes, "The inference market eventually expected to become much larger than the one for training, this sets AMD up well to see strong revenue growth in the future." Broadcom’s ASIC technology and partnerships with companies like Alphabet and OpenAI position it for explosive growth in the AI market. As Geoffrey Seiler, a Motley Fool contributor, notes, "Citigroup is an advertising partner of Motley Fool Money," and the company has a disclosure policy that requires transparency in its recommendations. Overall, the stocks of Broadcom and AMD could have higher upside than Nvidia in the coming years, making them attractive options for investors looking to capitalize on the growing AI chip market.
https://www.fool.com/investing/2026/01/11/should-you-forget-nvidia-and-buy-these-2-artificia/