Tech giants Nvidia and Broadcom both recently announced 10-for-1 stock splits, as their shares have surged past $1,000 due to the high demand for artificial intelligence (AI) products. Nvidia completed its split earlier this month, while Broadcom’s split is set for next month. With the AI market expected to grow significantly in the coming years, analysts predict that it could reach $1 trillion by the end of the decade. This growth potential, combined with the strong prospects for both companies, makes them attractive investments.
Nvidia, known for its high-performance graphics processing units (GPUs) used for AI tasks like training and inference, has seen triple-digit growth in profits and record revenue thanks to its dominant position in the AI market. The company is also making strides in sovereign AI and is expected to generate billions in revenue from this sector. While Nvidia has become more expensive post-split, it remains a solid buy.
On the other hand, Broadcom specializes in semiconductors and networking products, with a strong presence in AI data centers. The company’s AI revenue grew by 280% in the last quarter, and it predicts revenues exceeding $11 billion for the year. With a leading position in the Ethernet switching chip market and recent acquisition of VMware contributing to revenue growth, Broadcom is also a promising investment.
Both Nvidia and Broadcom are key players in the AI space, but if one had to choose, Broadcom may be the preferred option. Trading at a discount to Nvidia currently, and with the potential for positive impact from the VMware acquisition, Broadcom’s stock offers good value for investors. Additionally, investing in Broadcom before the stock split would allow buyers to purchase a share at a lower price without relying on fractional shares.
Ultimately, whether to buy Broadcom now or wait for the split depends on the investor’s strategy and budget. For those looking to invest smaller amounts, waiting for the split might be beneficial. However, for those planning to invest larger sums, there is no need to wait, as Broadcom remains a strong investment in the growing AI market.
Article Source
https://www.fool.com/investing/2024/06/26/better-stock-split-buy-nvidia-vs-broadcom/