Nvidia (NASDAQ: NVDA) and Broadcom (NASDAQ: AVGO) are two of the best investments you can make right now in the stock market, let alone the artificial intelligence (AI) sector. These two have massive upside over the next few years, yet a look at their valuations suggests the market has not priced in any growth, unlike with some of their AI peers. That points to an investment opportunity, and investors might want to take advantage before the market figures things out.
A $10,000 investment (or any amount) split between these two should deliver fantastic returns over the long term. Once investors see their 2030 valuation estimates, it will be clear that these two are smart buys.
Missed Nvidia in 2009? This Rare Signal Is Flashing Again. In 2009, a “Double Down” signal flashed for a little-known chipmaker called Nvidia. For the first time in years, that same “Total Conviction” signal is flashing for a company 1/100th the size of Nvidia. Continue »
Data centers are being built everywhere
Nvidia and Broadcom provide important components in the hardware that fuel AI computing. Nvidia offered the best general-purpose computing products at the start of the AI race, and this helped it build a first-mover advantage. Now its products are associated heavily with AI computing.
However, Nvidia’s graphics processing units (GPUs) aren’t always the best tool for the job. Sometimes, the flexibility of a GPU isn’t needed, and a more specialized computing unit makes more sense economically. That’s where custom AI chips from Broadcom gain the advantage, as its computing units are designed specifically with an end user’s workload in mind.
Neither company’s products will completely replace the other. They are great complements to each other, and each one has a strength and a weakness. Combined, these two provide a great computing solution that many AI hyperscalers have already deployed in tandem.
But where are these two companies headed by 2030? Each has very strong long-term guidance that shows us the path.
The AI build-out is far from over
Broadcom’s short-term guidance is downright incredible. It expects around $115 billion in AI semiconductor revenue in 2027, doubling to $230 billion in 2028. Nvidia told investors during its most recent earnings call that it expects 70% revenue growth during 2027. Those are strong growth rates, but they don’t project out to 2030.
For that, I’ll use Nvidia’s long-term call that data center capital expenditures will reach $3 trillion to $4 trillion by 2030. What’s noteworthy about this forecast is that Nvidia management believes the big five AI hyperscalers will spend about $800 billion on capital expenditures this year. When other players are added in, that figure could reach around $1 trillion. So, the market size is forecast to triple or quadruple by 2030.
