Broadcom Poised to Dethrone Nvidia as Custom Silicon Supremacy Takes Hold
Nvidia's dominance in the AI chip market may be short-lived, according to an analyst who believes Broadcom is poised to take over as the preferred supplier of custom silicon.
The analyst notes that every AI boom crowns a new king, and betting on the current one at peak valuation can lead to investors being left holding the bag when the throne shifts.
Broadcom's strength lies in its ability to build custom silicon for hyperscalers, which are learning what workloads they actually run and want silicon shaped to those workloads. The company is already shipping XPUs to six customers, including Google's TPU v7 and v8i, Meta's MTIA line, and OpenAI's Jalapeno accelerator.
Broadcom's growth in AI semiconductor revenue was impressive at 221% year over year, with Q3 fiscal 2026 revenue coming in at $29.59B, up 85.5% from the previous year. The company's free cash flow was $13.67B, equal to 46% of revenue.
The analyst notes that Nvidia is a wonderful business but is priced like one, with a P/E of 44 and a market cap of $5.296 trillion. Broadcom, on the other hand, sits at a $1.658 trillion market cap with a dividend history that compounds.