Deciphering the Best AI Chip Stock: NVDA, AVGO, or INTC?

NNicholas October 8, 2023 4:37 AM

As the artificial intelligence (AI) boom continues, chip stocks are seeing a significant rally. This article compares tech titans Broadcom (AVGO), Nvidia (NVDA), and Intel (INTC), providing a comprehensive analysis of each company's potential growth in the AI market as per Wall Street Analysts' perspectives.

Broadcom's performance and Wall Street's confidence

Broadcom's shares have seen a hefty 51% upswing this year, riding the waves of the AI boom. But it hasn't all been smooth sailing as the company's Q4 FY23 revenue growth prediction of just 4% wasn't exactly met with cheers from investors, especially when compared to Nvidia's market-beating forecast. To add salt to the wound, Alphabet's reported consideration to ditch Broadcom as its AI chip supplier in favor of Marvell Technology was another blow to investor confidence. Despite all this, Wall Street analysts are keeping their faith in Broadcom, viewing it as a significant semiconductor player set to gain from the growing AI demand.

Nvidia's high-flying success story

Nvidia is undoubtedly the star performer with its shares soaring a staggering 213% this year. The reason? A surge in demand for its graphics processing units (GPUs) as companies race to fulfill their AI dreams. In line with this, Nvidia anticipates a whopping 170% hike in its Q3 FY24 revenue, demonstrating the company's confidence in its sky-high growth trajectory. Adding another feather to its cap, Nvidia has been added to Goldman Sach's prestigious Conviction Buy List, signifying the high potential it holds in the market.

Intel might not have seen as much of an uptick in its shares as Broadcom or Nvidia, with a 37% increase this year, but it's definitely been making strides in its comeback game. Despite repeated blows from a sluggish PC market and lukewarm demand for its central processors, the company has managed to navigate through choppy waters and deliver improved earnings. In its latest strategic move, Intel plans to separate its Programmable Solutions Group from the main business structure, indicating its readiness to adapt and evolve according to market needs.

Wall Street's bullish outlook on Nvidia

When it comes to Wall Street analysts, the verdict seems to be clear - they're all in for Nvidia and Broadcom, while Intel seems to be sidelined. Nvidia has not only outperformed Broadcom and Intel in terms of share growth this year but also looks set to continue its winning streak. Wall Street analysts predict the greatest potential for an upside in NVDA stock from its current levels, indicating a continued bullish trend for the company.

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