It’s no secret that semiconductor stocks have been particularly big winners amid the artificial intelligence (AI) revolution. With share prices skyrocketing, several high-profile chip companies have opted for stock splits this year. Some AI chip stock-split stocks you might recognize include Nvidia (NASDAQ: NVDA), Super Micro Computer (NASDAQ: SMCI), and Broadcom (NASDAQ: AVGO).
Indeed, each of these stocks has done wonders for many portfolios over the last couple of years. However, I see one of these chip stocks as the superior choice over its peers.
Let’s break down the full picture at Nvidia, Supermicro, and Broadcom and determine which AI chip stock-split stock could be the best buy-and-hold opportunity for long-term investors.
1. Nvidia
For the last two years, Nvidia has not only been the biggest name in the chip space but also essentially emerged as the ultimate gauge of AI demand at large. The company specializes in designing sophisticated chips, known as graphics processing units (GPUs), and data center services. Moreover, Nvidia’s compute unified device architecture (CUDA) provides a software component that can used in conjunction with its GPUs, providing the company with an enviable and lucrative end-to-end AI ecosystem.
While all that looks great, investors cannot afford to be starry-eyed due to Nvidia’s existing dominance. The table below breaks down Nvidia’s revenue and free-cash-flow growth trends over the last several quarters.
Category
Q2 2023
Q3 2023
Q4 2023
Q1 2024
Q2 2024
Revenue
101%
206%
265%
262%
122%
Free cash flow
634%
Not material
553%
473%
125%
Data source: Nvidia Investor Relations.
Admittedly, it’s hard to throw shade on a company that is consistently delivering triple-digit revenue and profit growth. My concern with Nvidia is not related to the level of its growth but rather its pace.
For the company’s second quarter of fiscal 2025 (ended July 28), Nvidia’s revenue and free cash flow rose 122% and 125% year over year, respectively. This is a notable slowdown from the last several quarters. It’s fair to point out that the semiconductor industry is cyclical,…
..