[Discussion] Why Pick ASIC? Chase Broadcom or Buy the Dip in Nvidia?

Tiger_comments
09-05

$Broadcom(AVGO)$ the next Nvidia? Broadcom 🚀 soared 12% after earnings.

  • Q3 revenue: $15.95B, +22% YoY (beat est. $15.84B)

  • Non-GAAP net profit: $8.40B, +37.3% YoY

  • EPS: $1.69, also beat expectations

On the call, CEO Hock Tan dropped a bombshell:

A new mystery customer placed a $10B order for Broadcom’s custom AI accelerator XPU. Rumor has it — OpenAI is set to begin mass production with Broadcom, shipping next year.

Why do tech giants like $Alphabet(GOOG)$ turn to Broadcom for AI ASICs?

Morgan Stanley notes cloud providers like Google, Amazon, Microsoft are aggressively investing in ASIC design.

Because Nvidia’s GPUs are insanely expensive 💰 and hard to get. Plus, you’re locked into CUDA software + NVLink for scaling. For hyperscalers and AI players desperate for compute but allergic to Nvidia’s price tag, ASICs are the alternative.

  • ASICs = lower cost, lower power, more efficient for inference workloads

  • Nvidia GPUs = superior raw performance, but higher risk & cost

What’s next for the stock? 📉📈

History shows:

  • If Broadcom pops big on earnings → stock usually dips for 2+ months.

  • If it dumps on earnings → tends to rebound hard for 2 months.

Right now, AVGO is up +12%. But Nvidia’s stock is falling below $170. NVIDIA’s PE & PEG are both at a reasonable level.

So the big question: Do you chase AVGO’s rally, or buy NVDA’s dip?

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# Broadcom Jumps 10%! AI Chip Rally, Is Nvidia’s Pullback Over?

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Comment（37）

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  • Shyon
    ·09-05
    TOP
    Broadcom’s $Broadcom(AVGO)$ earnings were strong, and that $10B custom AI order shows big cloud players want alternatives to Nvidia. ASICs may not fully replace GPUs, but they’re cheaper, more efficient for inference, and make Broadcom an important player in the AI ecosystem.

    Still, I’m cautious about chasing AVGO after a +12% spike, since history shows it often cools off post-earnings. Meanwhile, Nvidia’s dip looks more attractive — despite competition, it still dominates training workloads and the CUDA ecosystem, which are hard to replace.

    For now, I’d watch Broadcom for consolidation while eyeing NVDA’s $NVIDIA Corp(NVDA)$ pullback as a better entry. Both can benefit from the AI boom, but I see Broadcom as the custom chip play and Nvidia as the core AI bet, with each serving different needs in the market.

    @Tiger_comments @TigerStars

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  • highhand
    ·09-05
    TOP
    do neither. avgo went up too high. don't chase the dragon. nvda drop but didnt drop below fair value.  be patient. wait for the whole market or index to correct
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  • Cadi Poon
    ·09-05
    TOP
    在看漲期權，首席執行官Hock Tan拋出了一個重磅炸彈：

    一個新的神祕客戶放了一個$10B訂單對於博通的定製AI加速器XPU。有傳言說-OpenAI將與博通開始大規模生產，明年發貨。

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  • TimothyX
    ·09-05
    Morgan Stanley指出，Google、Amazon、微軟等雲提供商正在積極投資ASIC設計。

    因爲Nvidia的GPU非常昂貴💰而且很難得到。另外，您被鎖定在CUDA軟件+NVLink中進行擴展。對於渴望計算但對Nvidia的價格標籤過敏的超大規模企業和人工智能玩家來說，ASIC是另一種選擇。

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  • TheStrategist
    ·09-05
    Chips are done
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  • 闪电侠08
    ·09-06
    i k
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  • Myrttle
    ·09-06
    $NVIDIA(NVDA)$ have got a really good ecosystem which the AI companies can’t resist
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  • ECLC
    ·09-06
    Too high to chase and not low enough to buy. KIV
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  • Tigermooo
    ·09-06
    Stay on the sideline :)
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  • Jezza67
    ·09-06
    I'm not sure either are the right move.
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  • Woodys
    ·09-06
    I will look at buying Nvidia at the available discount. I see this company continuing its dominance in this sector.
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  • AN88
    ·09-06
    reputable company.buy dip in nvidia
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  • Tora Spring Drive
    ·09-06
    Buy Nvidia only if it falls a little more, still slightly overpriced
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  • Universe宇宙
    ·09-06
    TOP
    NVIDIA and Broadcom cater to different customer groups and markets, though there might be some areas where they overlap. I think both companies have a bright future ahead and I hope they can find ways to collaborate effectively within the open community, as well as with competitors like Intel.

    $NVIDIA Corp(NVDA)$ , $Broadcom(AVGO)$ , $Intel(INTC)$ , $Advanced Micro Devices(AMD)$ , $Qualcomm(QCOM)$

    @MHh @Shyon @icycrystal @rL @TigerGPT

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    • Universe宇宙Replying toShyon: 
      [Chuckle] [Chuckle]
      09-06
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    • Shyon: 
      Welcome back
      09-06
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    • TigerAI: 

      Conclusion: The analysis of NVIDIA (NVDA) and Broadcom (AVGO) reveals distinct strategies and market dynamics, particularly in the context of ASICs (Application-Specific Integrated Circuits) for AI applications. Choosing between investing in Broadcom after its recent earnings surge or taking advantage of a dip in NVIDIA depends on your risk tolerance and investment strategy.

      Supporting Points

      Divergent Product Offerings:

      NVIDIA primarily focuses on high-performance GPUs that dominate the gaming and AI markets. While NVIDIA’s GPUs offer superior raw performance suitable for AI training and complex graphics workloads, they come with a high price tag and reliance on proprietary software (CUDA and NVLink).  

      Broadcom, on the other hand, looks to capture the ASIC segment with its custom AI accelerators, offering lower costs and enhanced efficiency for inference workloads. The recent announcement of a $10 billion order from a mystery customer signals strong demand for Broadcom's products, particularly among hyperscalers like Google and Amazon, who are increasingly investing in ASIC designs to reduce costs and power consumption.  

        

      Market Performance and Trends:

      Broadcom’s Q3 results showed a revenue of $15.95 billion, an impressive 22% year-over-year increase, with non-GAAP net profit soaring to $8.40 billion (+37.3% YoY). This performance merits attention, particularly with the stock having increased by 12% after earnings.  

      Historically, Broadcom's stock tends to experience a cooling-off period after significant price increases, suggesting that while current momentum is strong, it might not sustain in the short term. Conversely, NVIDIA's stock is currently facing downward pressure but may present a buying opportunity for investors seeking long-term growth, especially as its P/E and PEG ratios remain reasonable.  

        

      Competition and Collaboration Risks:

      The competitive landscape is evolving with Intel and AMD also vying for market share in AI and data centers. As tech giants invest in alternative chip designs (specifically ASICs), there is potential for collaboration between NVIDIA, Broadcom, and even competitors in open-source communities. This could reshape the tech landscape, providing varied options for consumers while pushing down prices.  

        

      Conclusion

      Deciding whether to invest in Broadcom after its earnings surge or buy NVIDIA during its dip will depend on individual investment goals and risk appetite. Broadcom’s current momentum and significant order pipeline represent immediate growth potential, while NVIDIA’s persistent demand in the GPU market and reasonable valuation offer a conceivable long-term investment opportunity. Therefore, investors should carefully consider market trends, company fundamentals, and competitive contexts before making their choice.

      TigerAI is provided solely as a tool to assist with investment research. Any content generated is for informational purposes only and does not take into account your personal objectives, financial situation, or needs. It does not constitute any investment advice, offer, solicitation, or recommendation regarding any financial products or strategies. We do not guarantee the accuracy or completeness of the content and past performance is not indicative of future results. You should not make any investment decisions based solely on the output. Always conduct your own research and consult a licensed financial advisor where appropriate.

      09-06
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  • hd87
    ·09-06
    TOP
    Broadcom’s 12% surge on strong earnings and a huge $10B AI accelerator order hints at serious AI growth potential, possibly challenging Nvidia’s dominance with more cost-effective ASIC solutions. However, Broadcom’s historical post-earnings pattern of dips suggests caution—this rally might pause or pull back soon. Nvidia’s dip below $170 presents a compelling buy opportunity given its leading GPU tech and reasonable valuation. For those choosing between chasing Broadcom’s momentum or buying Nvidia’s dip, I'd lean toward buying NVDA on the dip for long-term AI exposure, while waiting for clearer signals before chasing AVGO’s rally amid typical post-earnings volatility. Balancing timing and fundamentals is key here.

    @BillyR @linkoog @Abaaa

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  • Lanceljx
    ·09-06
    Chasing AVGO here feels risky—history shows its post-earnings spikes often retrace as institutions lock in gains. A better approach may be to wait for consolidation before entering.

    NVDA’s dip, on the other hand, offers a more attractive setup. Its fundamentals remain intact, with AI demand still the strongest tailwind in semis. If you believe in the multi-year AI story, buying weakness in Nvidia aligns with the higher-conviction trade.

    In short: AVGO = momentum with downside risk, NVDA = secular growth with dip-buying opportunity.

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  • Star in the Sky
    ·09-06
    the more news they announced the more I will give this counter a miss for the moment
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  • diggydog
    ·09-06
    Buy the dip $NVIDIA(NVDA)$ [Miser] [Miser]
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  • Longlong49
    ·09-07
    NVIDIA 👑
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  • MHh
    ·09-07
    TOP
    I won’t chase AVGO’s rally. The best chips available is still from Nvidia. AVGO can only be considered second option if one cannot get hold of Nvidia’s chips due to the high demand or the high price point. In the longer term. AVGO’s chips demand will still be high as long as NVDA cannot keep up with all of market’s demand. However, if NVDA can keep up, demand for AVGO should drop. With the recent rally, I find that the safety margin for it has reduced and I would prefer to watch for the dip to consider entry. NVDA’s dip may continue to dip further with increased competition. However, I still have faith in it’s superiority and will allow the full dip before considering entering too. Otherwise, the safer option for me would be to buy SMH and hold. @Success88 @Kaixiang @HelenJanet @DiAngel @Fenger1188 @SPOT_ON @Wayneqq @LuckyPiggie come join
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