- Summary:
- Broadcom share price has had a scintillating run in the last month, outperforming Nvidia and drawing comparisons between the two AI giants.
Broadcom share price extended its gains in Monday’s trading session, as it was up by 1.8% in the pre-market session and traded at $224 at the time of writing. The company’s stock has been on a hot streak in recent days, stealing some limelight from Nvidia with 34% in monthly gains.
Broadcom vs Nvidia and why Broadcom could win
Nvidia, the market leader in AI GPU sales has registered a -8.6% decline in its stock price performance in the last month. That has seen investors increasingly leading toward Broadcom as a value stock relative to NVDA. Not only that, but Broadcom has an enviable list of buyers including Meta, Alphabet, OpenAI and ByteDance.
Broadcom (NASDAQ: AVGO) reported a 212% growth in AI revenue in 2024 to $12.2 billion, driven by rising demand for its Application Specific Integrated Circuit (ASIC). In addition, the company’s CEO Hock Tan, projects that that figure could rise to between $60 billion-$90 billion in the next three years, as demand for custom AI networking infrastructure soars.
In a worst-case scenario, the outlook for Broadcom share price looks better compared to market leader, Nvidia. While Nvidia has generated mind-boggling revenues from the AI mania, skeptics have been warning that the AI industry has not developed enough to justify the figures.
However, should the AI “bubble” burst, Broadcom still has a significant portion of its revenue generated from supplying wireless chips for smartphones manufacturing companies. That could provide a softer landing should the AI ship hit an iceberg.
Broadcom share price prediction
Broadcom share price pivots at $223 and the buyers are in control as signaled by the momentum indicator. That will likely see AVGO moving upwards to meet the first resistance at $230. An extended control by the buyers could generate more gains to test the second resistance at $235.
Alternatively, the momentum will shift to the downside and sellers will take control if AVGO price moves below $223. That could see the first support come at $217. Breaking below that level will invalidate the upside narrative. Also, the resulting momentum could extend the decline and test the second support at $212.
