Nvidia, the leader in graphics processing units (GPUs) for artificial intelligence (AI), is facing a challenge from rival Broadcom. The semiconductor company’s application-specific integrated circuits (ASICs) are gaining traction in the AI market, with analysts estimating a 60% market share in custom AI chips.
Broadcom’s ASICs are being used by three major hyperscalers: Alphabet, Meta Platforms, and ByteDance. This has led to concerns that Nvidia will lose market share, especially if Broadcom’s growth accelerates. Analysts at Morgan Stanley predict that ASICs will account for 13% of AI accelerator sales in 2027, up from 11% in 2024.
However, Nvidia remains optimistic, citing its robust ecosystem and code libraries that streamline GPU application development. The company is also well-positioned to maintain its leadership in AI accelerators, with Bank of America analysts estimating it will capture 75% market share in 2030.
Analysts at the Motley Fool note that Nvidia’s adjusted earnings are expected to increase by 34% annually through fiscal 2027, making the current valuation look reasonable. Prospective investors can buy shares with confidence, and current shareholders have good reason to be optimistic going forward.
Despite Broadcom’s gains, Nvidia is not losing its competitive edge quickly. The company has a strong position in the AI market, and its shares are still attractive investment opportunities.
Source: https://finance.yahoo.com/news/nvidia-stock-investors-just-got-100000697.html