Broadcom Owns the Backstage; AMD Fights for the Spotlight Alex Sirois Wed, October 7, 2026 at 7:15 AM EDT 4 min read AVGO +3.67% AMD +2.80% NVDA +0.14% GOOG +0.22% META -0.41% Explore stocks on Coinbase Trading disclosure Trading disclosure The above button links to Coinbase. Yahoo Finance is not a broker-dealer or investment adviser and does not offer securities or cryptocurrencies for sale or facilitate trading. Coinbase pays us for certain activity generated through this link. Prices displayed are informational.
Broadcom's AI revenue jumped 221% to $16.70B on custom XPUs while AMD's data center doubled but trades at a P/E near 245.
Hock Tan claims custom XPUs outperform any GPU at half the cost, with Google and Meta already committed to multi-generation Broadcom chip deals.
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Broadcom (NASDAQ:AVGO) and AMD (NASDAQ:AMD) both beat expectations on AI data center demand. Broadcom designs custom chips that hyperscalers use under their own names. AMD sells its own Instinct GPUs and EPYC CPUs and competes openly with NVIDIA (NASDAQ:NVDA).
Broadcom's fiscal Q3 revenue rose 85.5% to $29.59B. AI semiconductor revenue reached $16.70B, up 221%, so the supplier that works behind the scenes now drives most of the growth. Custom XPUs made up 73% of AI revenue. Alphabet (NASDAQ:GOOGL) unit Google is receiving TPU v8i production shipments, OpenAI's first-generation Jalapeno accelerator is shipping, and Broadcom expects to deliver three generations of MTIA accelerators to Meta Platforms (NASDAQ:META) by the end of 2027.
AMD's Q2 revenue rose 50.1% to $11.54B. Data Center sales jumped 107% to $6.72B, or 58% of revenue, which makes AI the core of the business. Gaming fell 31% to $779M as the console cycle aged. Broadcom has no consumer drag like that.
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Broadcom CEO Hock Tan put it bluntly: "When you co-develop a chip that is optimized for your particular LLM workloads, you will outperform any GPU." He also claimed custom XPUs run at "half the cost of a GPU." That sales talk takes aim at AMD and Nvidia alike.
AMD's answer is full server racks. Its Helios system combines Venice CPUs, MI450 GPUs, and Pensando networking, and AMD says it delivers up to 30% more tokens per dollar than competing systems. OpenAI, Anthropic, and Meta buy from both companies. The frontier AI labs are spreading their orders across suppliers.
AMD forecast Q3 revenue to about $13B, and Lisa Su called Q3 "the very beginning of the ramp" for Helios. The key question is whether Helios sales spread beyond a few anchor customers ordering at gigawatt scale. Broadcom forecast Q4 AI revenue to $21.7B, up 236%. Its gross margin guidance of about 73% compares with 78% a year ago, likely because custom XPUs now make up a larger share of sales. Tan says demand tops the outlook. Still, land, power, and substrate supply decide when that capacity actually ships.
AMD is up 203.24% year to date versus 9.18% for Broadcom, and AMD trades at a P/E near 245. A valuation that high means AMD can barely afford a stumble on Helios. Broadcom generated $13.66B of free cash flow, or 46% of revenue, against AMD's $1.56B. That cash flow plus customer contracts spanning several chip generations gives Broadcom steadier fundamentals. AMD offers more direct exposure to the fight for GPU market share. That comparison would shift if Helios ships broadly in early 2027 while Broadcom's margins keep slipping.
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