Beyond Nvidia: Two AI Stocks with Explosive Upside

Nvidia (NVDA) has turn into a dominant force in the tech sector, largely due to its graphics processing units (GPUs) powering the artificial intelligence (AI) revolution. Its CUDA software platform and networking solutions have created a significant competitive advantage, particularly in large language model (LLM) training. While Nvidia’s growth has been impressive – revenue has increased eightfold over the past three years, with a 73% increase last quarter – the company now faces challenges related to scale and increasing competition. As AI data center spending is projected to exceed $700 billion this year [1], investors may desire to consider other companies poised for substantial growth in the AI infrastructure space.

Broadcom: The Custom Chip Leader

Broadcom (AVGO) is benefiting from the growing demand for both networking and custom AI chips. The company is a leader in data center networking, with its Tomahawk Ethernet switch being a key component in AI data centers, optimizing data flow and preventing bottlenecks. Revenue in this segment grew 60% in the first quarter of 2026 and is expected to accelerate.

Broadcom’s biggest opportunity lies in custom AI chips, specifically application-specific integrated circuits (ASICs). ASICs are designed for specific tasks, offering high performance and energy efficiency, particularly valuable for AI inference. Broadcom provides the blueprints and intellectual property to help customers turn their designs into scalable, high-yield chips. Following its success in developing Tensor Processing Units (TPUs) for Alphabet, other hyperscalers are increasingly turning to Broadcom for ASIC services.

Broadcom projects that its AI ASIC revenue will exceed $100 billion in fiscal 2027, surpassing its total fiscal year 2025 revenue by more than 1.5 times. This represents substantial growth potential.

AMD: The Agentic AI Infrastructure Play

Advanced Micro Devices (AMD) is positioned at the intersection of GPU and CPU trends. While trailing Nvidia in the overall GPU market, AMD has established a niche in the inference market and secured significant GPU commitments from OpenAI and Meta Platforms, including equity warrants tied to AMD’s stock performance.

AMD is also a leader in data center central processing units (CPUs). While GPUs provide processing power, CPUs manage workflow coordination and data management, becoming increasingly important with the rise of agentic AI. AI agents require robust CPU capabilities for complex tasks, presenting a significant growth opportunity for AMD alongside its GPU business.

Key Takeaways

• Nvidia remains a dominant player, but faces challenges related to scale and competition.
• Broadcom is a leader in data center networking and custom AI chips (ASICs), with projected explosive growth in AI ASIC revenue.
• AMD is well-positioned to benefit from the growth of both GPUs and CPUs, particularly with the emergence of agentic AI.

As the AI landscape evolves, diversification beyond Nvidia may offer investors greater potential for growth. Both Broadcom and AMD are strategically positioned to capitalize on key trends in AI infrastructure, making them compelling investment opportunities.