- Broadcom earnings preview as AI spending shifts toward efficiency. Can AVGO outpace Nvidia in 2026 as demand for custom AI chips accelerates?
This is the final major earnings week of the season, and despite the sense of déjà vu around “big tech week,” the next 48 hours genuinely matter. Oracle (NYSE: ORCL) reports Wednesday evening, followed by Broadcom (NASDAQ: AVGO) after the Thursday closing bell. Together, these two companies sit at the intersection of enterprise software, cloud infrastructure, and the fast-maturing AI race.
For traders, the reaction to these reports, not just the numbers, could redefine whether semiconductors continue to outperform software heading into 2026.
Bloomberg highlighted a noticeable pattern in tech: companies are no longer rewarded for “spending aggressively on AI.” Markets are becoming more selective, placing a higher premium on cost control, profitability and capital discipline. That shift is why commentary from both Oracle and Broadcom could set the tone for early 2026.
Why Investors Are Now Demanding Efficiency in AI Spending
Investors are increasingly asking a harder question: How efficiently is AI capital being deployed? Broadcom and Oracle represent both sides of the new equation:
- Oracle → AI-driven cloud and enterprise workloads
- Broadcom → custom AI semiconductors powering hyperscalers
This dynamic mirrors Meta’s “year of efficiency” in 2023. The market wants productivity, not unchecked spending, and this week’s commentary from both companies will either validate or challenge that thesis.
Nvidia vs Broadcom: Who Leads the 2026 AI Chipcycle?
Why Nvidia Still Dominates
Yahoo Finance notes that Nvidia continues to hold more than 90 percent of the AI data-center GPU market. Its CUDA ecosystem and NVLink architecture have created an environment where large language models and training workloads are overwhelmingly optimized for Nvidia hardware.
Flexibility is a major reason for this. GPUs can be reprogrammed and repurposed, making them the default choice for AI training.
Nvidia’s moat is not just hardware, it’s the software + developer ecosystem that has become the backbone of modern AI.
Where Broadcom Is Gaining Ground
But hyperscalers are clearly trying to reduce their reliance on Nvidia. In 2025, we have seen a rise in demand for custom ASICs, chips designed for a single, highly efficient task.
This is where Broadcom’s opportunity becomes enormous:
- Broadcom helped Alphabet develop its TPU family, now considered the leading non-Nvidia alternative.
- The company confirmed earlier this year that three large AI ASIC customers represent more than $60 billion in potential revenue over the next few years.
- A fourth customer, unnamed but widely discussed in market commentary, placed an unexpected $10 billion order, set to begin shipping in late 2026.
- Reporting from The Information noted that OpenAI is planning to deploy over 10 gigawatts of Broadcom-based AI chips by 2029.
For a company generating roughly $63 billion in annual revenue, the upside is transformational.
ASICs lack the flexibility of GPUs, but they consume less power and cost far less to scale, a major advantage as AI workloads shift from training to inference, where efficiency matters more than raw performance.
Broadcom vs Nvidia in 2026: Which Stock Wins?
Both companies will likely perform well next year. AI data-center investment remains in a multi-year expansion cycle, and neither Nvidia nor Broadcom is at risk of a slowdown in demand.
I beleive that Broadcom has the superior growth asymmetry. This is because Nvidia already dominates a market it helped create. Broadcom is entering a multi-trillion-dollar opportunity with a smaller base, faster customer adoption, and structural tailwinds driven by hyperscalers seeking diversification.
AVGO doesn’t need to “beat” Nvidia to outperform, it just needs to keep scaling its ASIC business. And right now, every major cloud provider wants exactly what Broadcom is selling.
If the AI infrastructure story accelerates in 2026, Broadcom may be the stealth outperformer, and this week’s earnings call could be the moment that narrative fully takes shape.
Oracle doesn’t run on Broadcom but it does integrate with Broadcom’s Automic Automation OCI Agent, which lets enterprises automate workflows across Oracle Cloud Infrastructure using Broadcom’s automation technology.
Yes, Broadcom could outperform Nvidia in 2026, not by replacing GPUs, but by capturing a rapidly growing market for custom AI chips. . If hyperscalers keep shifting toward lower-cost ASICs, Broadcom’s earnings momentum may accelerate faster than Nvidia’s, giving AVGO a strong chance of beating it on a growth basis next year.
Broadcom is emerging as Nvidia’s strongest competitor, thanks to its rapid expansion in custom AI chips designed for hyperscalers seeking lower-cost alternatives to GPUs.
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