Tech Giants NVIDIA and Broadcom Offer Buying Opportunities Amid Market Corrections

The Nasdaq Composite has seen a decline of 3.97% over the past month, indicating a market correction, particularly affecting tech stocks. Such market pullbacks can create opportunities for long-term investors to acquire high-quality stocks at reduced prices. Notably, key players benefiting from the artificial intelligence (AI) boom, NVIDIA (NVDA) and Broadcom (AVGO), have experienced substantial decreases of 4.69% and 7.05%, respectively, during this period. Given their strong positions in AI hardware and infrastructure, could these stocks be compelling options for long-term investors?

NVIDIA: A Leader in AI Advancements

NVIDIA has solidified its position as a leader in AI computing, with its Blackwell architecture achieving unprecedented adoption rates. In the fourth quarter of fiscal 2025, the company reported data center revenues of $35.6 billion, culminating in an annual revenue total of $115.2 billion, which is more than double the previous year’s figures. The Blackwell rollout has been described as NVIDIA’s fastest product launch to date, driven by demand for AI model training, post-training, and inference workloads. Major cloud providers, including AWS, Google Cloud, and Microsoft Azure, were among the first to incorporate NVIDIA’s new GB200 systems into their AI frameworks.

Furthermore, NVIDIA is branching into custom AI chips through collaborations with significant industry firms, which ensures it has diverse revenue streams beyond its traditional AI GPUs.

In the fourth quarter, NVIDIA’s revenues totaled $39.3 billion, which is a 78% increase year-over-year and exceeds the Zacks Consensus Estimate of $37.7 billion. Sales related to AI, particularly in the data center sector, now account for over 80% of total sales. As AI adoption further expands into enterprises and sovereign initiatives, the upcoming Blackwell Ultra chips are poised to drive additional growth.

Despite a decrease of 4.69% in stock value, NVIDIA’s technological leadership, increasing AI demand, and expansion into new markets affirm its status as a solid long-term investment. Its current valuation remains attractive, trading at a forward 12-month price-to-earnings (P/E) ratio of 28.05, which is below the industry average of 29.29, suggesting a potential undervaluation compared to peers.

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Broadcom: A Strong Player in AI Infrastructure

Broadcom’s AI-related revenues experienced a remarkable 77% growth, reaching $4.1 billion during the first quarter of fiscal 2025, underscoring its dominance in AI infrastructure. The company’s strengths in AI networking and custom silicon are showcased through innovations like the Tomahawk 6 switches and AI accelerators (XPUs), integral for building AI clusters at large scales. Broadcom has already partnered with three leading hyperscalers for significant AI accelerator projects and is currently collaborating with four more to develop custom XPUs, expanding its influence in the AI sector.

In the first quarter, Broadcom reported revenues of $14.92 billion, exceeding the Zacks Consensus Estimate and marking a 24.71% increase from the previous year. The company anticipates AI revenues to grow to $4.4 billion in the second quarter, indicating consistent momentum in AI-driven growth. Furthermore, its acquisition of VMware is boosting Broadcom’s expansion into enterprise AI and cloud sectors, with the VMware Private AI Foundation already being utilized by 39 enterprise clients in conjunction with NVIDIA.

Despite a 7.05% decline in stock value, Broadcom’s expertise in AI networking, strong partnerships with hyperscalers, and development of AI-driven software infrastructure position it as an attractive long-term investment. From a valuation perspective, the stock is trading at a forward 12-month price-to-earnings (P/E) ratio of 30.79, under its one-year median of 34.24, indicating a favorable entry point for investors.

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Conclusion: The AI Investment Opportunity

With the AI market poised for explosive growth in the coming decade, purchasing shares of NVDA and AVGO during this market dip could lead to significant long-term returns. Broadcom holds a Zacks Rank #1 (Strong Buy), while NVIDIA has a Zacks Rank #2 (Buy), suggesting both are solid investment opportunities. You can see the complete list of today’s Zacks #1 Rank stocks here.

Zacks Highlights Top Semiconductor Stock

While NVIDIA remains strong, our new top semiconductor stock is just 1/9000th its size and has significant room for growth after rising over 800% since our recommendation. This promising stock shows robust earnings growth and a rapidly growing customer base, positioning it to satisfy the soaring demand for artificial intelligence, machine learning, and the Internet of Things. The global semiconductor market is projected to expand from $452 billion in 2021 to $803 billion by 2028.

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This article was originally published on Zacks Investment Research (zacks.com).

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The views and opinions expressed herein are those of the author and do not necessarily reflect those of Nasdaq, Inc.