Key Takeaways:
- NVIDIA trades at roughly 24x forward earnings today, down from peak multiples above 50x in 2023, while Broadcom sits at approximately 31x forward earnings, a premium that reflects its growing software mix from the VMware acquisition.
- Analysts project NVIDIA revenue of approximately $370 billion for calendar year 2026, up roughly 72% year-over-year, while Broadcom is expected to reach approximately $104 billion in fiscal 2026 revenue, up roughly 63%.
- NVIDIA generated approximately $96.7 billion in free cash flow in its most recent fiscal year at a 45% FCF margin, while Broadcom produced roughly $26.9 billion at a 42% FCF margin as VMware integration investments compressed margins from historical highs above 48%.
- Under mid-case assumptions, TIKR’s valuation model suggests Broadcom could deliver approximately 164% total upside through 2030 and NVIDIA roughly 147% through 2031, but both scenarios require sustained AI infrastructure spending and continued pricing power.
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Both stocks have had a remarkable run. Broadcom (AVGO) has compounded at roughly 55% annually over the past five years. NVIDIA (NVDA) has delivered one of the most extraordinary single-stock performances in market history, rising over 1,200% in the same period.
But with both companies trading at elevated multiples and Wall Street projecting growth rates that would require each business to scale dramatically from an already enormous base, the more useful question is not whether AI is real. It is whether today’s prices already reflect everything that could go right.
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One Sells the Picks. The Other Sells the Shovels and the Mine.
NVIDIA designs the GPUs that have become the default compute platform for AI training and inference. Its CUDA software ecosystem has created deep switching costs for developers who have optimized workflows around its architecture. The company outsources manufacturing to TSMC, keeping capital requirements low relative to the revenue it generates.
Broadcom is more complex. Its semiconductor segment sells networking chips, custom AI accelerators, and storage solutions. The $69 billion VMware acquisition in 2023 added a large enterprise software business on top of that. The result is a hybrid of high-margin recurring software revenue and more cyclically sensitive semiconductor revenue.
That distinction matters when comparing the two on any valuation metric. A pure software business commands different multiples than a chip company. Broadcom sits somewhere between the two, which makes the premium it currently commands over NVIDIA harder to evaluate at face value.
Broadcom Trades at a Higher Multiple Than NVIDIA Despite Growing More Slowly
Broadcom’s forward P/E sits at approximately 31x today. That same multiple was around 17x in early 2021 before AI became the dominant market narrative. The stock has nearly doubled on a multiple basis alone before accounting for earnings growth.
NVIDIA’s forward P/E of approximately 24x looks more reasonable in isolation. But the stock traded below 20x as recently as early 2023. Its forward EV/EBITDA of roughly 19x and forward EV/FCF of approximately 27x remain well above five-year averages.
The counterintuitive result is that Broadcom trades at a premium to NVIDIA on most forward metrics despite lower near-term revenue growth. The market is paying for software revenue predictability and the custom accelerator opportunity with hyperscalers. Whether that premium holds depends almost entirely on the execution of VMware integration, delivering the margin expansion the thesis requires.
The Numbers Wall Street Is Betting On
For Broadcom, 41 analysts project revenue of approximately $104 billion for fiscal 2026, up roughly 63% year over year. The EPS consensus sits around $11.43, up approximately 68%. By fiscal 2027, revenue estimates average approximately $158 billion, implying another 52% increase as accelerator volume scales and VMware subscription conversions continue.
NVIDIA’s estimates are even more aggressive. With 51 analysts contributing, consensus projects revenue of approximately $370 billion for calendar 2026, up roughly 72%. EPS is expected to be around $8.34, up nearly 75%. The 2027 consensus from 53 analysts implies another $484 billion in revenue, roughly 31% additional growth on top of an already massive base.
Both companies have consistently beaten estimates over the past two years. NVIDIA in particular has surprised to the upside by wide margins, which partly explains why elevated multiples have persisted. Whether that pattern continues depends on whether AI infrastructure spending accelerates further or begins to normalize.
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NVIDIA Generates Almost Four Times the Free Cash Flow
Free cash flow is where the real quality difference between the two businesses becomes visible.
NVIDIA generated approximately $96.7 billion in free cash flow in its most recent fiscal year at a 45% FCF margin. That is more annual free cash flow than most S&P 500 companies produce in total revenue. It underwrites the valuation at current multiples and provides flexibility for buybacks and continued R&D.
Broadcom generated approximately $26.9 billion in free cash flow at a 42% FCF margin. That margin compressed from the high 40% range prior to the VMware acquisition, as the integration required significant investment. If margins recover toward historical levels as the software business matures, FCF could grow faster than revenue over the next two to three years.
That recovery scenario is one of the more compelling aspects of the Broadcom thesis. But it is a thesis that requires patience and execution, not one that is already reflected in reported numbers.
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What the Return Math Looks Like Under Different Scenarios
Running mid-case assumptions through TIKR’s valuation model reveals meaningful differences in the risk profile of each investment.
For Broadcom, the mid-case targets approximately 164% total upside through October 2030, implying roughly 24% annualized returns. That embeds revenue growth of roughly 26% annually with net income margins expanding toward 53%. The high case implies approximately 594% upside. Even the low case generates meaningful returns, though the annualized figure compresses toward 15%.
For NVIDIA, the mid-case implies roughly 302% total upside through January 2031, representing an annualized return of approximately 17%. The low case, where growth moderates toward 18% annually, still generates over 186% upside given the margin profile. Moderate deceleration leaves significant return potential, reflecting the cushion that a lower current multiple provides relative to Broadcom.
The scenario worth thinking through is what happens if hyperscalers pause AI infrastructure spending in 2027 or 2028 to absorb existing capacity. Under that condition, NVIDIA’s lower multiple and stronger FCF generation provide more natural downside protection. Broadcom’s higher multiple requires simultaneous execution across semiconductor and software segments, leaving less margin for error.
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How Much Upside Does NVDA Stock Have From Here?
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Disclaimer:
Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any stocks mentioned. Thank you for reading, and happy investing!
