Nvidia and Broadcom compete in AI chip market following latest earnings reports

Nvidia and Broadcom are shifting from chip specialists to competing architects for entire AI data centers. While Nvidia expands its general-purpose GPU dominance with software acquisitions like Hugging Face and partnerships with AWS, Broadcom leverages custom silicon (XPUs) for hyperscalers like Alphabet, Meta, and OpenAI. Nvidia trades at lower valuation multiples despite guiding to 70% growth, while Broadcom projects its AI revenue to double annually, reaching $230 billion by fiscal 2028.

AI infrastructure platform expansion

• ▪Broadcom's infrastructure software segment, bolstered by its VMware acquisition, generated $8.8 billion in revenue, representing a 29% year-over-year increase.
• ▪Nvidia acquired the generative model sharing platform Hugging Face for $12.9 billion to expand its software ecosystem.
• ▪Nvidia's data center segment generated $89 billion in revenue during the second quarter, representing a 117% increase from the previous year.
• ▪Nvidia's Grace CPUs generated over $5 billion in sales over the last year, while its Vera Rubin CPUs are projected to generate approximately $20 billion next quarter.

Hyperscaler deployment partnerships

• ▪Broadcom's custom silicon pipeline includes supporting Anthropic's expansion from 1 gigawatt of Ironwood to 5 gigawatts of TPU v8i by 2027.
• ▪Nvidia is co-funding a 12-gigawatt data center campus in Ohio for OpenAI alongside partner SoftBank Energy.
• ▪Nvidia expanded its partnership with Amazon Web Services to supply an additional 2 million GPUs through fiscal 2029.
• ▪Broadcom is supporting OpenAI's deployment of 1.3 gigawatts of Jalapeno inference chips in 2027, projected to exceed 5 gigawatts by 2028.

Custom silicon market competition

• ▪Broadcom's custom accelerators, or XPUs, accounted for 73% of the company's $16.7 billion in AI semiconductor sales in the last quarter.
• ▪Broadcom serves as a multiyear design partner for Alphabet's Google Cloud TPUs and Meta Platforms' custom MTIA chips through 2027.

Revenue growth projections

• ▪Nvidia projected current-quarter revenue of $108 billion, excluding China data center compute, and estimated fiscal 2028 revenue growth at approximately 70%.
• ▪Broadcom raised its fiscal 2026 AI revenue forecast to $58 billion and projected AI revenues of $115 billion in fiscal 2027 and $230 billion in fiscal 2028.
• ▪Broadcom projected current-quarter revenue of $34.8 billion, with AI semiconductor sales expected to grow 236% year-over-year to $21.7 billion.