NVIDIA vs Broadcom Stock: Which Is Best?

If you want to invest in an AI-leading tech company, NVIDIA and Broadcom likely stand out as strong options. But what if you could only choose one company? Would you bet your investment dollars on NVIDIA or Broadcom? It’s no big surprise that the answer depends on what you expect to get in return for your investment.

In the following sections, we’ll take a close look at NVIDIA, Broadcom, their financials, and some of the global events that might influence your decision.

NVIDIA Is a Powerhouse Company With Little to Lose

NVIDIA has been an impressive player in the GPU sector for over a decade. More recently, though, its technology has helped fuel the ongoing AI revolution. It’s difficult to imagine AI’s rapid spread without help from NVIDIA’s hardware.

The company’s financial releases make its technological prowess more evident than ever. Its most recent financial report from November shows that NVIDIA’s revenue grew 17% (an impressive $35.1 billion) from the previous quarter. Year to year, revenue grew 94%, meaning it nearly doubled over 2024.

Jensen Huang, the company’s founder and CEO, said in a press release that AI was “propelling a global shift to NVIDIA computing,” especially when it comes to products like Hopper, which has been critical to AI’s success. The upcoming Blackwell product is expected to fuel even more growth in this area.

In keeping with NVIDIA’s excellent year, the company’s stock price grew from about $48 in mid-December of 2023 to over $125 in mid-December of 2024. Knowing these facts, it probably seems obvious that you should add NVIDIA shares to your portfolio, but there are some potential downsides to consider.

Upcoming Tariffs Could Damage NVIDIA’s Success

NVIDIA is a U.S. company, but it relies on Taiwanese factories to build its hardware. Outsourcing to Taiwan has made a lot of sense for NVIDIA because it helps keep prices low and Huang knows the country well (he was born there). That could change when the incoming Trump administration takes power.

Trump has threatened to enforce 40% to 60% tariffs on goods imported to the U.S. from China. Assuming members of the Trump administration don’t make an exception for NVIDIA and similar companies, costs could skyrocket and put them at a significant disadvantage. If manufacturers in the U.S. need to pay 60% more money on the NVIDIA hardware that has powered AI innovations, they will either need to find new suppliers, pass the costs to consumers, or scale down their expectations. Any of those options would likely undermine NVIDIA’s financial success.

Broadcom Has Shown Exceptional Recent Promise

Broadcom just wrapped up a stellar fiscal year, and the results have a lot of investors excited to buy more shares. The company’s 2024 revenue was 51% higher than last year, meaning it brought in over $14 billion this year. Yes, that’s a considerable amount lower than NVIDIA’s revenue, but there is no denying Broadcom showed impressive growth within just one year.

Again, Broadcom’s success has largely been driven by the AI frenzy. Broadcom might not have NVIDIA’s public brand recognition, but it designs and manufactures exceptional chips used by companies like Apple and Meta.

Broadcom also looks like a good option for dividend investors. In December, it announced that it would raise its quarterly dividend disbursements by 11%, bringing next year’s first payout to $0.59 per share. For comparison, NVIDIA will only pay out $0.03 per share. In fact, NVIDIA’s dividend yield has shrunk over the last few years even as the company has grown.

Like NVIDIA, Broadcom’s stock price has soared as AI technology became essential to the success of other businesses. In mid-December of 2023, you could buy a share of Broadcom (AVGO) for about $105. Recently, the stock’s price reached $250 for the first time, although it quickly tumbled to $218 within a few days. Even after losing some value, AVGO looks like an up-and-coming stock that’s attractive to short-term and long-term investors.

Reasons You Might Want to Avoid Broadcom

After all of that positive information, why wouldn’t you want to buy Broadcom shares? There are two main reasons: Taiwan and share price.

Like NVIDIA, Broadcom relies largely on Taiwanese factories to build its hardware. Harsh tariffs would almost certainly have similar effects on Broadcom as they would on NVIDIA. Unless the incoming president changes his mind or makes exceptions for companies based in the U.S., prices will become unaffordable.

Speaking of unaffordable prices, $218 is an awfully high entry point for many investors. You could almost buy two shares of NVIDIA for that amount. Granted, you would get a higher dividend payout from Broadcom, but that only offsets the financial pain by a small amount. You still have to justify spending a lot of money on a company with an uncertain future.

Should You Buy NVIDIA or Broadcom?

If you can’t tolerate much risk, now probably isn’t the right time to buy NVIDIA or Broadcom shares. You might want to hold any shares you already own and wait to see whether the Trump administration decides to follow through with its tariff promises. Keep in mind that the administration has made a lot of promises, and it’s unlikely that the government can move fast enough to fill them all within the first year of his tenure.

If you can afford a slight risk and you don’t care much about dividends, NVIDIA is probably the right option because shares cost significantly less. Regardless of what happens in the coming years, you won’t have as much money to lose. Even if the stock price does fall for a few years, there’s the possibility that NVIDIA could thrive again when Trump’s term expires. That would depend on the incoming president and their economic policies.

Let’s say you can accept more risk and you really want to benefit from dividend payouts. In that case, it might make sense to invest in Broadcom. Just remember that the always-uncertain market will probably become even more uncertain in the coming year.

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The author has no position in any of the stocks mentioned. Financhill has a disclosure policy. This post may contain affiliate links or links from our sponsors.