AMD vs. Broadcom: The Better AI-Chip Stock to Buy After the Sell-Off

A brutal week for spot stocks ended with the PHLX Semiconductor Index successful a carnivore market, down much than 20% from its June peak. Two of the AI (artificial intelligence) trade's flagship names went down with it. Advanced Micro Devices (NASDAQ: AMD) present trades astir 15% beneath its high, portion Broadcom (NASDAQ: AVGO) has fallen astir 25% from its own.

Both companies, meanwhile, are executing astir arsenic good arsenic they ever have. Falling banal prices and accelerating businesses marque for a bully clip to comparison the two.

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So, which chipmaker deserves caller wealth aft the sell-off?

AMD: accelerating, and priced similar it

AMD's first-quarter results showed a institution hitting its stride. Revenue roseate 38% twelvemonth implicit twelvemonth to $10.3 billion, led by the information halfway segment, wherever gross climbed 57% to $5.8 cardinal connected beardown request for its EPYC server processors and the continuing ramp of its Instinct AI accelerators. Non-GAAP (adjusted) net per stock roseate 43% to $1.37, and escaped currency travel deed a quarterly grounds of $2.6 billion. Even the lawsuit business, which sells chips for idiosyncratic computers, grew 26%. Profitability is moving the close way, too, with the company's adjusted gross borderline expanding to 55% from 54% a twelvemonth earlier.

And the maturation is speeding up. Management guided for second-quarter gross of astir $11.2 billion, implying astir 46% year-over-year maturation -- up from 38% successful Q1. CEO Lisa Su said lawsuit engagement astir the company's upcoming MI450 bid accelerators and Helios rack systems is strengthening, with forecasts from starring customers exceeding AMD's archetypal expectations.

The occupation is the price. At astir $500 per stock arsenic of this writing, AMD trades astatine astir 67 times this year's expected net and astir 37 times adjacent year's. The banal besides pays nary dividend.

That's a terms that assumes AMD volition proceed to summation stock successful AI chips for years to come. It might. But that result is mostly priced successful already.

Broadcom: faster growth, cheaper banal

Broadcom's fiscal 2nd 4th (the play ended May 3, 2026) was arguably adjacent stronger. Revenue climbed 48% twelvemonth implicit twelvemonth to $22.2 billion. The prima was AI semiconductor gross (the customized AI accelerators and networking chips it builds for unreality giants), which soared 143% to $10.8 billion. Adjusted nett income came successful astatine $12.1 billion, and escaped currency travel was $10.3 billion, a staggering 46% of revenue.