Artificial intelligence has been the driving force behind the stock market’s gains since late 2022. The debut of ChatGPT that November demonstrated the practical capabilities of generative AI, leading to heightened investor enthusiasm for AI-related companies. Since then, the market capitalizations of the six biggest tech companies have surged by $8 trillion.

Two of the biggest winners were Nvidia (NASDAQ:NVDA) and Broadcom (NASDAQ:AVGO). Their market valuations rose 681% and 378%, respectively.

Nvidia, of course, has largely become the face of the AI revolution and at times has been the most valuable company on the market. It grew from a $416 billion valuation in November 2022 to over $3.25 trillion today. It added $2.8 trillion all by itself.

But Broadcom was no slouch either. It rose from a market cap of $230 billion to over $1.1 trillion, nearly a $1 trillion addition in a little over two years.

With the AI runway still very broad and exceptionally long, focusing on these two chipmakers for further investment makes sense. If you have $75,000 to invest, here is your best play.

The bull case for Nvidia

Nvidia’s graphics processing units (GPUs) are used by all the major AI hyperscalers and data centers. Its H100 accelerators are currently the gold standard in AI processing because of their ability to take the large amount of compute power the technology demands and operate quickly and efficiently.

The chipmaker is about to release its next generation Blackwell chips, which is even faster ad more powerful than its predecessor. The supply of these advanced AI accelerators has already been sold out through the end of 2025 and Nvidia is already working on what comes next, code-named Ruben.

To understand how huge Nvidia has become, in the third quarter, the chipmaker’s data center segment, which houses its AI business, generated $30.2 billion in revenue. That is more than Nvidia made in its entirety for the full year of 2022 ($26.9 billion).

The bear case for Nvidia

Yet Nvidia faces headwinds. Competition is ratcheting up with Advanced Micro Devices (NASDAQ:AMD) developing semiconductors that can match the performance of Nvidia’s, but are priced lower.

That’s important because Chinese AI lab DeepSeek just released a large language model that was built using cheap, underpowered accelerators, which could change the dynamic of how AI advances in the future. It threatens to undercut Nvidia’s pricing power, if not its sales.

Its current customers are also all developing their own AI chips. Amazon (NASDAQ:AMZN), Meta Platforms (NASDAQ:META), and Alphabet (NASDAQ:GOOG)(NASDAQ:GOOGL) have built AI accelerators to break away from their reliance upon Nvidia. They will still use NVDA chips, but the volumes may decline going forward.

Trade tensions between the U.S. and China could also impede Nvidia’s growth. Tit-for-tat tariffs would likely hurt the sales of Nvidia’s equipment sales.

The bull case for Broadcom

Broadcom is argubaly best known as one of the the premier provider of mobile device chipsets. Apple (NASDAQ:AAPL) accounts for accounted for 20% of its total revenue. Smartphones continue to represent a large percentage of the Broadcom’s operations, but the chipmaker transitioned to focus more on data center infrastructure, such as Ethernet switching and routing silicon. 

With its AI chips housed in that segment, Broadcom’s custom AI accelerators and merchant networking chips for hyperscalers are driving its growth. Broadcom said its AI networking revenue, which represented 76% of all its networking business, grew 158% year-over-year in the third quarter. It expects its data center total addressable market to hit $90 billion by 2027.

Where AI represented 15% of total revenue last year, Broadcom says will amount to 35% by the end of its fiscal year (it reports earnings on Mar. 6).

It might not catch up to Nvidia, but Broadcom is rapidly expanding and widening its lens to be a major player in the market.

The bear case for Broadcom

Like its rival, Broadcom stock plunged 17% when DeepSeek released its R1 model. It could also be impacted by trade tensions. TikTok owner ByteDance, for example, is a big customer of the chipmaker’s products. While President Trump wants to keep TikTok active, there remains a big cloud surrounding its ultimate end. 

One of the biggest arguments against Broadcom is valuation. With Wall Street predicting revenue growth of 19% this year, well below the 44% growth it enjoyed recently, investors might fear the coming slowdown and selloff the stock.

Where Nvidia’s climb has been meteoric, Much of Broadcom’s growth has come in just the last six months and it added some $200 billion in market cap in just the last two months.

The verdict

While an investor could buy both stocks with their $75,000, splitting it evenly between the two, I find Broadcom the better play here.

Its valuation is lower than Nvidia’s, though still expensive, but it is in the sort of growth phase Nvidia was in at the start of this new I revolution. It is growing at triple digit rates where its rival is seeing its growth rates decline. No company can continue growing at such a pace, but the current situation suggests AVGO stock has the better opportunity to see further price appreciation than Nvidia.

However, no one should bet the farm on any one stock. That becomes gambling, not investing. All your money could blow up if one thing goes wrong with a single stock so building a diversified portfolio of stocks still remains the best option when wanting to retire early.

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