AMD’s Whole AI Story Has One Threat It Cannot Ignore: Broadcom

AMD’s Whole AI Story Has One Threat It Cannot Ignore: Broadcom Alex Sirois Mon, September 7, 2026 at 9:47 PM GMT+9 4 min read AMD +4.69% AVGO +0.21% Quick Read AMD's data center revenue doubled to $7 billion, but Broadcom's AI semiconductor revenue hit $17 billion growing 221%, revealing a massive scale gap.

OpenAI, Anthropic, and Meta are AMD customers simultaneously co-developing custom accelerators with Broadcom, directly threatening AMD's addressable market at those accounts.

Broadcom's $14 billion free cash flow quarter and 15 consecutive dividend hikes give it structural staying power AMD's merchant GPU model cannot yet match.

Just released. Our analysts combed the entire stock market and named the ten best stocks to buy right now, and Broadcom didn't make the cut. Enter your email to see the names that beat AVGO. The report is free. Enter your email and see if any of your stocks made the cut.

AMD (NASDAQ: AMD) and Broadcom (NASDAQ: AVGO) both just delivered blockbuster AI quarters, but the two chipmakers are chasing the same dollars from opposite ends. AMD is selling merchant Instinct GPUs and EPYC CPUs into any datacenter that will buy them. Broadcom is co-designing custom silicon inside a handful of hyperscalers. That contrast is why Broadcom poses a structural threat to AMD's general-purpose GPU story.

AMD's Q2 FY2026 revenue hit $11.54 billion, up 50.1% year over year, with Data Center at $6.72 billion and +107% growth. Lisa Su said "Data Center revenue more than doubled year-over-year" and now expects Data Center segment revenue to more than double again in 2027. That is real momentum, and Helios shipments start later in Q3 2026.

Broadcom's Q3 FY2026 was on a different scale. Revenue reached $29.59 billion, up 85.5% year over year, and AI semiconductor revenue alone was $16.70 billion, growing 221% YoY and 54% sequentially. Hock Tan guided Q4 AI revenue to $21.7 billion, up 236% YoY, and sketched a fiscal 2027 AI outlook near $115 billion with supply already secured. The Q3 operating margin of 67.9% is in a different weight class than AMD's 27% non-GAAP operating margin.

24/7 Wall St has helped investors make money for over two decades, and our top analysts just finished ranking the definitive Top 10 Stocks To Buy Now. Not the ten biggest companies. Not the ten everyone is arguing about. The ten best stocks to buy right now.

The report is free, and you can see why we think each stock is a top investment today.

The uncomfortable overlap: three of AMD's marquee AI customers, OpenAI, Anthropic, and Meta, are also building custom accelerators with Broadcom. Tan argued that a co-developed XPU "will outperform any GPU" and can run at "half the cost of a GPU". If frontier labs shift training and inference to their own silicon, AMD's total addressable market at those accounts shrinks even as it ships MI450s.

The near-term optics favor AMD. Shares are up 195.18% over one year and 135.63% over six months, while Broadcom has cooled, down 14.44% in the past month. I want to see whether Helios yields improve on schedule and whether AMD's $1.4 trillion 2030 AI accelerator TAM assumption holds once Broadcom is delivering multi-tens of billions of TPUs to Google annually.

Personally, I lean Broadcom here. The $13.66 billion free cash flow quarter, the 15th consecutive dividend increase, and a customer roster that is effectively pre-selling 2028 capacity give it a defensive quality AMD cannot match yet. AMD is the more exciting story, especially if you believe merchant GPUs win outside the top four labs, and Reddit's bullish sentiment scores of 72 and 74 reflect that enthusiasm. But if custom accelerators keep eating frontier workloads, Broadcom is the one collecting the toll. I would rather own the toll booth (we reverse-engineered what the biggest tech winners looked like early and put the traits into a free playbook you can grab here).

If you have cash sitting in your account right now, give this two minutes. After more than two decades of helping investors beat the market, our top analysts at 24/7 Wall St. put together a definitive report on the Top 10 Stocks To Buy Today. And AVGO wasn't one of them.

They combed the entire market. It's not 10 ideas, not 10 stocks everyone is talking about, it's what their research points to as the 10 best stocks to buy right now, and it's free. Read more here and see which stocks made the list -->>

Contact editorial@247wallst.com for any questions or corrections.