Ever since the Trump administration took a 10% stake in Intel (INTC 5.68%) in August 2025, shares of the chipmaker have skyrocketed by more than 70% -- from $24 per share to about $43 at this writing.
This year alone, Intel stock has climbed 15% year to date. It's not just the investment by the U.S. government that has fueled Intel, as it also got a $5 billion investment from Nvidia (NVDA 1.53%) to partner on making chips for data centers and PCs.
The company has also generated excitement with its innovative new Panther Lake CPU chips, rolling out this month. In addition, Intel has narrowed the losses in its foundry business, and investors are hoping for a continued turnaround there.
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Intel stock falls on weak outlook
There are some risks with Intel. For starters, the chipmaker just posted lackluster earnings for its fiscal fourth quarter. While it beat earnings estimates, revenue fell 4% from a year ago. But more concerning is its first-quarter revenue outlook, which was below analysts' estimates. The main culprit was supply constraints, which won't allow Intel to meet demand. As a result, the stock plummeted 22% from its recent peak.
Also, the company had been operating at a net loss for the better part of the past two years, only breaking above water in 2024's third quarter. So its valuation is sky-high, as the company has seen its stock price surge with little net income to show for it.
That makes it a bit of a risky play, to me, not counting the intense competition and any potential concerns about international customers balking because of the U.S. government stake, even though it is a passive one.
Instead, investors should turn their attention to another, more reliable star in the AI universe, Broadcom (AVGO 1.63%).
Broadcom has put up Nvidia-like returns
While Nvidia gets most of the headlines, Broadcom has performed nearly as well. The stock has returned about 32% over the past year, beating Nvidia, and has a five-year annualized return of about 48%. That's short of Nvidia's five-year annualized 68% return, but it's certainly no slouch.
Broadcom is a chipmaker, but it does not compete directly with Nvidia. It makes a variety of semiconductor chips designed for moving data across large networks, such as broadband, telecommunications, and mobile networks, as well as for hyperscalers and data centers.
In its two fastest-growing markets -- the networking chips and the AI application-specific integrated circuits, or ASIC, chips for hyperscalers -- it is the dominant player, with a roughly 70% to 80% market share in each.
Broadcom's revenue has been surging in recent years, fueled by AI. In Q4, revenue from its AI-related chips jumped about 74% year over year and accounted for roughly one-third of its total revenue. In the upcoming fiscal Q1, Broadcom projects record revenue of $19.1 billion and a roughly 100% increase in AI chip revenue, year over year.
Revenue over the next several quarters will be driven by its $73 billion backlog in AI-related orders, as AI-related income becomes a larger part of the overall revenue mix.
Certainly, a multiyear partnership with OpenAI announced last October to design and deploy 10 gigawatts of AI accelerators to boost the performance of AI applications will be another major source of income for Broadcom.
By 2030, the company is targeting $90 billion to $120 billion in AI related revenue. That would be up from about $20 billion in 2025. Reaching the high end of the target range would mean about 43% annual growth over the next five years.
A good long-term value
Quite simply, Broadcom stands at the center of the AI revolution and should reap the benefits for a long time to come as the dominant player in the space.
If there are concerns, it's the risk of having revenue more concentrated in fewer clients than say Nvidia, but these large hyperscale clients mostly have long-term deals and are deeply embedded, so the risk is not all that great. Broadcom enjoys a fairly wide moat with efficiencies of scale, high switching costs, and advanced technologies.
What makes Broadcom also stand out is its relatively lower valuation. It is trading at 33 times forward earnings, which is about the Nasdaq 100 average. But if you look at the five-year price-to-earnings-to-growth (PEG) ratio of 0.9, you see it's a good value given its projected growth over the next five years.
And as an added benefit, Broadcom is one of the relatively few technology companies that pay dividends. It's low-yield, about 0.8%, but Broadcom has increased it every year for the past 15 years, so its a reliable income generator. It might be even better to invest that back into the portfolio to boost the total return.
Intel's enjoying a nice run, but Broadcom is one of the best long-term stocks you can buy. Its a no-brainer.
