Nvidia Fell While AMD and Broadcom Jumped. Here’s What History Says Happens Next to All 3 Stocks.

Nvidia's stock has experienced a decline while AMD and Broadcom have seen an increase in their stock prices. This difference in performance can be attributed to various factors, with history providing some insights into what might happen next for these tech giants. Nvidia, AMD, and Broadcom all operate in the data center computing sector, with Nvidia and AMD designing GPUs that excel at handling a wide range of computationally heavy workloads.

However, GPUs are more expensive than application-specific integrated circuits (ASICs), which are custom AI chips becoming popular among data center operators. Nvidia holds the largest share of the data center market, with recent revenue growth, while Broadcom's AI semiconductor division is growing faster but still smaller. AMD lags behind in data center revenue growth but could potentially benefit the most if Nvidia's market leadership weakens.

With Jensen Huang stepping down as CEO, there is uncertainty about Nvidia's future, but the company's products are likely to remain strong, and effective leadership will likely prevent any major setbacks. When evaluating these stocks, it's essential to consider their prices relative to next year's earnings projections. Broadcom is already in fiscal year 2027, trading at 17 times forward earnings, while Nvidia and AMD show significant valuation gaps.

Nvidia is currently trading at 10.6 times next year's earnings, while AMD is valued at 29 times. While AMD's valuation appears high, it may be justified given its potential for growth and AMD's strong AI capabilities. Broadcom, on the other hand, is trading at a relatively low valuation, making it an attractive option for investors seeking AI chips with higher upside potential and lower risk.

Overall, the market seems to favor Broadcom as the best choice among the three, with Nvidia showing promise for a rebound once the current negative news cycle subsides.