Both stocks have had strong runs in 2024. Let's consider which semiconductor looks like the better buy heading into 2025.

Broadcom estimates revenue from its three existing hyperscale customers will range from $60 billion to $90 billion in 2027, up from $12.2 billion in 2024. In other words, the company anticipates that custom AI chip sales will increase at least 70% annually in the next three years, but perhaps as quickly as 95% annually.

One analyst noted that the type of AI chip Broadcom makes could pick up market share relative to “costly” graphics processing units.

The competition for leadership in the AI chip market is intensifying, with Broadcom Inc. positioning itself as a formidable challenger to Nvidia Corporation in the years ahead.

Nvidia is one of the most popular AI stocks right now because of its lead in the semiconductor space. The company's graphics processing units (GPUs) have been used in data centers for years, and once tech giants began competing for generative AI dominance, the chips were even more in demand.

Broadcom may have had a volatile year, but the stock was rising on investor enthusiasm Tuesday as it headed for its best year on record. The California-based tech company is known for making application-specific integrated circuits,