OpenAI’s recent partnerships with major tech firms, particularly AMD and Broadcom, have reshaped the AI investment landscape. While AMD aims to boost its AI chip presence by providing favorable terms to OpenAI, it may not be the optimal investment choice. Broadcom, however, stands out with its custom AI accelerators, which saw a remarkable 63% revenue growth, hitting $5.2 billion in Q3 FY 2025. This growth trajectory is expected to continue, with anticipated semiconductor revenues of $6.2 billion for Q4.
Broadcom’s tailored chip solutions promise cost-efficiency and high performance, potentially capturing a significant share of a $60 to $90 billion market by 2027. Despite its stock being priced at over 51 times forward earnings, it remains a compelling option compared to AMD’s 60 times valuation. As such, Broadcom may be the smarter investment for those looking to capitalize on AI advancements.
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