Broadcom vs. Nvidia: 3 Key Metrics Point to the Stronger AI Chipmaker to Buy After Earnings

Both Nvidia and Broadcom recently reported strong earnings, with Nvidia's adjusted revenue growing by 106% year-over-year and Broadcom's adjusted net revenue growth at 86%. Despite both companies exceeding Wall Street estimates, analysts and investors are focusing on three key metrics to determine which AI chipmaker is the stronger buy after earnings.

Broadcom's current quarter revenue projection of $34.8 billion falls slightly below analyst estimates of $35.03 billion, but CEO Hock Tan is optimistic, projecting AI semiconductor revenue to double by 2027 and again by 2028, surpassing analyst expectations. Nvidia, on the other hand, beat estimates with a current quarter revenue forecast of $108 billion and projected 70% annual revenue growth in fiscal year 2028.

Both companies show strong gross margins, with Nvidia expecting a 74% margin in the current quarter and a contraction to the 71-72% range later in the fiscal year due to higher memory costs. Nvidia's forward earnings multiple is currently cheaper than Broadcom's, which could be attributed to Broadcom's more optimistic AI growth expectations.

While Nvidia's GPU business is impressive, its CPU business has attracted investor attention. However, the Motley Fool Stock Advisor analyst team did not recommend Nvidia, despite its outstanding performance, and suggests considering other top-performing stocks for long-term growth.