In the artificial intelligence (AI) realm, there have been few better investments in recent years than chip stocks. Specifically, I'm a huge fan of Nvidia (NVDA +3.90%), AMD (AMD +2.13%), and Broadcom (AVGO 0.31%) because they are fabless chip companies. This means they design chips, but outsource their manufacturing. This model leads to fairly asset-light businesses with fantastic margins.
This trio of stocks has already delivered incredible returns over the past few years, but with all of the money that will be spent on AI computing hardware in 2026 and beyond, I believe they're far from done rising. But which of them looks like the best one to hold in 2026?
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Different approaches to hardware
These companies are in different stages of deploying their AI computing hardware. Nvidia is the market leader by far, and its graphics processing units (GPUs) are still the go-to computing units for training and running artificial intelligence models. Soaring demand for its chips has allowed it to rapidly grow into the world's largest company by market cap. Its margins also rose to impressive levels, and it's one of the strongest businesses on Earth right now. Additionally, it's about to launch its next chip architecture, Rubin, which will be a significant step up from the already impressive Blackwell architecture chips it has been selling.
NASDAQ: NVDA
Key Data Points
AMD, by contrast, seems to be providing second-tier offerings in most of the chip categories it sells, though its CPUs are highly regarded. But it has been working hard to close the gap. AMD's GPUs are less pricey alternatives to Nvidia's GPUs, and their performance specs are solid, but one area where the company had been coming up short was with its software platform: Its ROCm software, which allows its GPUs to be programmed for specific uses, isn't nearly as good as Nvidia's CUDA. However, AMD's management noted that downloads of its ROCm software increased tenfold year over year in November 2025, indicating that its chips are being explored more widely as viable alternatives to Nvidia's. According to numerous independent research firms, Nvidia still controls more than 90% of the discrete GPU market, with AMD holding most of the remainder. If AMD can claw away even a modest slice of the leader's market share, it could be an incredible stock to own.
Broadcom is taking a different approach to AI computing. Nvidia and AMD design their computing units to be flexible, general-purpose parallel processors, able to handle a wide variety of workloads well. But in the world of AI, that sort of flexibility is sometimes unnecessary -- some chips deployed by AI hyperscalers may only handle one variety of workload for their entire operational lives.
Broadcom partners directly with AI hyperscalers, designing bespoke computing units for each of its clients that are optimized for the specific workloads they will face. These custom AI accelerator chips, known as application-specific integrated circuits (ASICs), can deliver superior processing speeds at lower costs.
NASDAQ: AVGO
Key Data Points
Nvidia is actually the cheapest of the three
Each of these companies operates on a different fiscal calendar, which makes comparing the projections for their upcoming years inexact -- but the exercise still offers useful results.
AMD operates on the standard calendar year, and according to the analysts' consensus, it's expected to deliver 32% revenue growth in 2026. It currently trades for 40 times its expected 2026 earnings. Of the three, its growth rate is the slowest, and it isn't the cheapest. This could limit the stock's upside potential.
NASDAQ: AMD
Key Data Points
Although there may be a perception among some investors that Nvidia is an overvalued stock, it's really not. It trades at 24 times its expected earnings for fiscal 2027 (which will end Jan. 28, 2027). Wall Street also expects it to deliver blistering fast growth -- the average analyst covering the stock predicts 52% growth in fiscal 2027. In the battle of AMD versus Nvidia, Nvidia makes the most sense to buy because it's cheaper and growing more quickly.
Broadcom is the wild card. Its ASICs are taking the AI world by storm, and that division of the company is growing rapidly. Management expects its AI semiconductor revenue to double year over year in Q1. However, Broadcom has numerous other business units that aren't growing nearly as fast. For its fiscal 2026, which will end in early November, analysts expect 52% growth -- the same as Nvidia's. Broadcom stock is slightly more expensive than Nvidia at 31 times forward earnings. However, if Broadcom's growth rate turns out to be higher than analysts expect due to rising demand for its custom chips, I believe its stock could outpace Nvidia's this year.
I think it's a coin flip between Broadcom and Nvidia as to which will be the best stock to own this year, and investors would be better off to have both in their portfolios (as I do). AMD hasn't shown enough to make it worthy of consideration, but that could change if it can deliver a few quarters of strong results.
