The artificial intelligence (AI) market expanded rapidly over the past decade, but it could still be in its infancy. According to Grand View Research, the global AI market could still expand at a 30.6% CAGR from 2026 to 2033 as more industries use AI to streamline their operations.
Nvidia (NVDA 0.87%) and Broadcom (AVGO +1.43%) are two of the easiest ways to profit from that secular trend. Let's see why these two "best in breed" plays in the AI market could deliver life-changing gains over the next few decades.
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What do Nvidia and Broadcom do?
Nvidia is the world's largest producer of discrete GPUs. Unlike CPUs, which are optimized for sequential tasks, GPUs are designed to process parallel tasks. That makes them more effective at processing graphics and training AI algorithms than stand-alone CPUs.
Nvidia controls more than 90% of the discrete GPU market and generates most of its revenue from data center GPUs. Most of the world's top AI companies use those GPUs, and Nvidia locks those clients into its proprietary programming platform and other first-party services.
NASDAQ: NVDA
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Broadcom sells a wide range of chips for the mobile, data center, networking, wireless, storage, and industrial markets. Over the past few years, it has also expanded its infrastructure software business with big acquisitions. By bundling together its chips and software, it locks in its customers and offsets the cyclical pressures of the broader semiconductor market.
Most of Broadcom's recent growth was driven by its sales of application-specific integrated circuits (ASICs) for accelerating custom AI tasks. Many hyperscalers are installing those custom AI accelerators to dilute their long-term costs and curb their dependence on Nvidia.
NASDAQ: AVGO
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Why do Nvidia and Broadcom have generational growth potential?
Nvidia's sales of discrete GPUs will continue rising, since it still sells the best picks and shovels for the AI gold rush. It reinforced its market dominance with its Turing (2019), Ampere (2020), Hopper (2022), and Blackwell (2024) chip architectures, and it plans to launch its next chip architecture, Rubin, in the second half of 2026.
Broadcom will also keep growing as its hyperscale customers order more custom AI accelerators to support more demanding applications. In fiscal 2025 (which ended last November), its total AI chip sales surged 65% to $20 billion, accounting for 31% of its top line. It aims to generate $60-$90 billion in annualized AI chip revenue by the end of fiscal 2027.
Both companies are growing their revenues and profits at high double-digit rates. However, Nvidia and Broadcom still trade at 18 times and 24 times their next year's earnings, respectively. Therefore, both stocks could have plenty of room to run as the AI market expands and evolves.
