This article first appeared on GuruFocus.
Sep 5 – Nvidia Corp. (NASDAQ:NVDA) slipped on Friday trading as investors weighed an earnings update from rival Broadcom Inc. (AVGO). The two companies sit at the center of the artificial intelligence chip race, but Broadcom’s upbeat outlook raised fresh questions about Nvidia’s long-term dominance.
Nvidia shares dipped 2.5% in morning trading, after gaining slightly on Thursday and breaking a five-day losing streak.
Broadcom, by contrast, surged 11% after reporting strong AI-related orders, including a $10 billion deal with an undisclosed customer. Multiple analysts pointed to OpenAI as the likely buyer, according to the Financial Times. If confirmed, the move would represent a significant step by OpenAI to rely less on Nvidia’s graphics processing units and more on Broadcom’s custom processors.
Broadcom’s CEO Hock Tan struck a confident tone, telling analysts he expects customers to steadily shift workloads toward its XPUs. While switching chips requires complex software adjustments, Wall Street sees growing adoption of custom AI hardware. Morgan Stanley estimates that custom processors could reach 15% of the market by 2030, up from 11% in 2024.
For Nvidia, the outlook remains strong, but Broadcom’s latest win underscores intensifying competition in AI infrastructure.