Broadcom vs Microsoft. Both Are Winning the AI Race. Only One Is Priced Like It

Broadcom (NASDAQ:AVGO | AVGO Price Prediction) and Microsoft (NASDAQ:MSFT) both delivered AI-fueled quarters revealing two different playbooks. Broadcom sells custom silicon and switches for hyperscaler data centers. Microsoft sells cloud, copilots, and the productivity layer on top. Comparing them shows how the AI buildout splits between picks-and-shovels suppliers and full-stack platform owners.

Custom Silicon Surges While Azure Carries Microsoft

Broadcom’s Q1 FY2026 earnings report landed on March 4, 2026, with revenue of $19.311 billion, up 29.47% year over year. AI semiconductor revenue hit $8.40 billion, growing 106%. CEO Hock Tan called the growth “driven by robust demand for custom AI accelerators and AI networking” and guided Q2 AI revenue to $10.70 billion. VMware kept the software side flat at $6.796 billion, growing just 1%. The chip side is driving results.

Microsoft reported Q3 FY2026 on April 29, 2026 with revenue…