Broadcom's (AVGO +0.31%) shares have gained over 132% in the past year, driven by explosive demand for artificial intelligence (AI)-powered networking solutions and custom AI chips. The VMware acquisition is also helping transition its revenue mix toward a higher-margin software business.
Yet, despite the business momentum, the stock is expensive. With shares trading at about 41 times forward earnings, a significant portion of the upside is already priced in, leaving very little room for error.
Image source: Getty Images.
However, AI leader Nvidia (NVDA 0.72%) is now trading at just 24.3 times forward earnings. Here's why Nvidia can prove to be a better pick in December 2025.
Multiple growth catalysts
Nvidia's valuation is backed exceptionally well by its robust execution capabilities and stellar financial performance. In the latest period (third quarter of fiscal 2026, ended Oct. 26), revenue was up 62% year over year to $57 billion, including data center revenue, which soared 66% to $51.2 billion. The company has provided an even stronger guidance for the fourth quarter, with revenue estimated to grow nearly 14% (at the midpoint sequentially), and high gross margins in the mid-70s.
NASDAQ: NVDA
Key Data Points
Management has cumulative revenue visibility of nearly $500 billion from shipments of its Blackwell and Rubin systems through 2025 and 2026. Around $150 billion in orders have already been shipped by the end of the third quarter. Hence, it's clear that Nvidia continues to benefit from the explosive demand of hyperscalers as they scale their GPU deployments for AI training and inference workloads.
Nvidia is committed to its annual product cadence (releasing new GPU architectures every year) and has built a market-leading AI technology stack. The company has announced plans to deploy 5 million GPUs in AI factories (large-scale facilities built to train and deploy AI models) and infrastructure projects, including cloud service providers, sovereigns, enterprises, model builders, and supercomputing centers across various regions.
Hence, the company is positioned to capture a significant share of the $3 trillion to $4 trillion AI infrastructure buildout opportunity by 2030. Nvidia appears to be a better buy now.
