Nvidia Rival Broadcom Makes Quantum Leap — Then Trips As AI Mood Sours

After Wall Street briefly celebrated the positive earnings report from artificial intelligence behemoth Nvidia (NVDA) before shares retreated, rival Broadcom (AVGO) also bounced back into buy range before reversing to give back the Thursday’s gains and more.

Showing the rattled AI boom may still stabilize its wobbly legs, Broadcom stock and Nvidia both made the latest monthly list of new buys by the best mutual funds. Despite recent turbulence, these two giants of the semiconductor sector each hold the highest-possible 99 Composite Rating, meaning they are outpacing 99% of all stocks on key fundamental and technical factors. But sharp sell-offs in AI leaders like Broadcom, Nvidia and Palantir Technologies (PLTR) this week once again put the principles of risk management and the eight “secrets” of selling in focus.

Broadcom Takes New Quantum Leap

Based in the heart of Silicon Valley in Palo Alto, Calif., Broadcom designs, develops, and supplies a broad range of semiconductor, enterprise software, and security products. As with Nvidia, its AI-fueled technologies are integral to powering cloud, data centers, networking, broadband, wireless, storage, and other equipment. Quantum computing further expands Broadcom’s growth opportunities.

On Wednesday, the company unveiled Brocade Gen 8, a high-performance storage network for enterprise AI designed to safeguardstorage for the quantum era. The Brocade Gen 8 portfolio underscores Broadcom’s focus on making storage networking platforms safe from threats posed by future quantum computers.

Over the last three quarters, Broadcom has delivered average earnings growth of 41.8%, including a 36% rise to $1.69 per share in its Sept. 4 report. Revenue rose 22% to $16 billion in the latest quarter.

For the full year, analysts forecast 39% earnings growth to $6.75 per share, followed by a 38% gain to $9.34 a share in 2026.

Broadcom Stock Outpacing Nvidia Year To Date

As of Thursday’s close, Broadcom stock has gained just under 50% year to date, topping Nvidia’s nearly 35% rise.

Broadcom hit an all-time high at the end of last month after breaking out past a 363.24 buy point in a second-stage cup with handle. But shares soon pulled back, eventually drifting below the 21-day exponential moving average and 50-day line.

Broadcom stock started Thursday by bouncing back above its 21-day and 50-day line, initially buoyed by Nvidia’s positive report. But Broadcom retreated to end the session below its 21-day line, even slipping below its 50-day benchmark. Shares fell again Friday but did come off the day’s lows.

After a big spike early Thursday that seemed to reassure jittery investors worried about a potential AI bubble, Nvidia also turned sharply lower. Turning an early gain into more than a 3% loss, the stock closed well below it 50-day line. Like Broadcom, Nvidia mitigated its losses but ended the eweek below the 50-day benchmark.

Such volatility in leading stocks and market indexes reinforces the need for investors should stay vigilant about following rules on how to buy stocks and when to sell them.

Follow Matthew Galgani on X (formerly Twitter) at @IBD_MGalgani.

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