NVDA, AVGO: These 2 AI Chip Leaders Are “Poised for Breakouts,” Says Top Analyst

2026-03-04 04:12:32

Artificial intelligence chip leaders Nvidia NVDA -1.33% ▼ and Broadcom AVGO -1.56% ▼ have continued to deliver strong business results, but their stocks have struggled to keep pace. According to Jefferies, the issue is not weak demand or execution. Instead, the debate in the market has shifted to valuation.

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In a new note, top Jefferies analyst Blayne Curtis said both companies still stand out as major winners in the AI boom, yet their stocks do not reflect that strength. “We still fundamentally believe both AVGO and NVDA are poised for breakouts as valuations are too depressed,” the 5-star analyst wrote.

Curtis added that the market may be overlooking how strong the AI demand cycle remains. In fact, Jefferies described Nvidia and Broadcom as two of the most certain AI winners, noting that their shares are still trading at what it called “basement bargain” valuations relative to their growth outlook.

Nvidia’s AI Momentum Remains Strong

Nvidia’s latest results once again showed strong demand for its AI chips. Shipments of the new Blackwell platform are ramping up, and demand visibility now stretches well into 2027.

Jefferies also highlighted the company’s fast-growing sovereign AI business, where governments build their own AI systems. Revenue from this segment reached about $30 billion in 2025, more than three times higher than a year earlier.

Another key driver is networking. As AI systems become larger and more complex, the need for high-speed connections between chips keeps rising. Jefferies said Nvidia’s networking unit is now posting double-digit sequential growth, turning it into a second major growth driver.

Still, the market reaction has been muted. The analysts summed up the situation in simple terms: “The train keeps rolling and somehow stays cheap.”

Broadcom Could Deliver a ‘Beat and Raise’

Jefferies expects a similar story at Broadcom. The company will announce its results for the first quarter of Fiscal 2026 on March 4. The firm believes AVGO could report another big “beat and raise,” helped by strong demand for AI chips and networking products.

Growth is being supported by new platforms such as Ironwood, along with rising demand from AI data centers. Jefferies also noted that networking revenue could grow faster than ASIC chips this year, which could help margins.

Even so, the analysts warned that strong results alone may not lift the stock right away. They pointed to Nvidia’s recent trading as an example, where solid earnings did not trigger a major rally.

Which AI Chip Stock Is the Better Buy Right Now?

Turning to Wall Street, both stocks carry a Strong Buy consensus from analysts. Nvidia has an average price target of $271.11, which implies about 50.6% upside from current levels.

Meanwhile, Broadcom also holds a Strong Buy rating. AVGO carries an average analyst price target of $449.46, suggesting roughly 43.2% upside, indicating solid potential gains ahead.

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