Applied Materials vs. Broadcom: Which Tech Stock Is a Better Buy in 2026?

As the demand for artificial intelligence infrastructure surges, investors are faced with choosing between Applied Materials (AMAT) and Broadcom (AVGO), two vital components in the global supply chain. Applied Materials manufactures the essential machinery for chip fabrication, while Broadcom designs specialized silicon and infrastructure software. Both companies play significant roles in the AI build-out, but in different stages of the production cycle.

Applied Materials posted strong financials in fiscal 2025, with revenue increasing by 4.4% to nearly $28.4 billion and a net margin of 24.7%. The company's customer base is heavily concentrated, with two customers accounting for approximately 19% and 15% of net revenue. Applied Materials maintains a low debt-to-equity ratio of 0.3 and a current ratio of nearly 2.6, indicating a strong ability to meet short-term obligations. The company generated $5.7 billion in free cash flow during the fiscal period.

Broadcom, on the other hand, reported robust revenue growth of 23.9% in fiscal 2025, reaching nearly $63.9 billion. The company's net income reached $23.1 billion, resulting in a net margin of 36.2%, which is substantially higher than Applied Materials. Broadcom's debt-to-equity ratio is approximately 0.8, and its current ratio is nearly 1.7.

The company's free cash flow was roughly $26.9 billion for the year. Broadcom's customer base is also heavily concentrated, with significant revenue dependence on Alphabet. The company faces regulatory challenges, including antitrust scrutiny in the EU related to its VMware operations.