A top chip stock analyst sees big things for Nvidia, Broadcom. How his case aligns with ours
The bullish sentiment comes despite calls to slow down AI model development and rekindled investor enthusiasm for a competing part of the AI chip ecosystem.
TL;DR
- Bernstein analysts are bullish on Nvidia and Broadcom, maintaining outperform ratings.
- Both companies are seen as having strong growth potential even in a constrained environment and are considered undervalued.
- Nvidia's GPUs are the industry standard for AI training, while Broadcom provides custom chips for specific AI workloads.
- Despite recent investor interest in CPUs due to agentic AI, analysts believe GPUs and custom AI accelerators will continue to thrive.
- Nvidia is projected to grow over 70% annually until 2027, and Broadcom could double revenues in 2027 and again in 2028.
- Nvidia trades at 17x forward P/E, below its 5-year average of 35x; Broadcom trades at 19.7x forward P/E, near its 5-year average of 23x.
- Executives from Nvidia and Broadcom do not foresee a slowdown in AI demand.
- Intel is also mentioned positively for its server strength and manufacturing business, though Nvidia and Broadcom remain core AI plays.