How Do AMD And Broadcom Stocks Affect Your Wealth?

(CTN News) – Broadcom (NASDAQ: AVGO) and AMD (NASDAQ: AMD) represent very different approaches to investing in the semiconductor market.

Among the world’s leading manufacturers of x86 CPUs and discrete GPUs, AMD ranks second. While Broadcom sells a wide range of wireless, networking, optical, data storage, and industrial chips, its software business offers infrastructure, cloud, and cybersecurity services.

In the past five years, AMD’s stock has risen by 625% and Broadcom’s stock has risen by 370%.

The performance of both stocks has outperformed that of the Philadelphia Semiconductor Index, which gained nearly 220%. Although AMD has clearly made its investors rich, is it still the best investment?

AMD vs. Broadcom differences

AMD impressed investors by gaining market share against Intel in the PC and server markets, keeping pace with Nvidia in gaming GPUs, and introducing new GPU products for the artificial intelligence (AI) market.

Through the acquisition of Xilinx in early 2022, AMD increased its portfolio of embedded chips to include field-programmable gate arrays (FPGAs), which can be customized for a variety of applications.

Broadcom sells a wide range of chips, but most of its revenue in fiscal 2023 (which ended last October) came from selling wireless, radio frequency, and 5G chips to Apple. Since acquiring CA Technologies, Symantec’s enterprise security unit, and VMware, Broadcom has built a new infrastructure software business.

With the completion of its acquisition of VMware last November, Broadcom intends to generate approximately half of its revenue from its software division.

What is the fastest growing chipmaker?

As a result of the acquisition of Xilinx, AMD’s revenue grew 44% and adjusted earnings per share increased 25%, respectively, in 2022. AMD’s slower PC CPU and GPU sales in post-pandemic markets were masked by this inorganic growth.

In 2023, AMD’s revenue and adjusted earnings per share fell by 4% and 24%, respectively, as it dealt with the ongoing slowdown in the PC market.

Those pains were exacerbated by the low sales of Sony’s PS5 and Microsoft’s Xbox Series S and X consoles, which are all powered by AMD’s semi-custom APUs. In order to offset some of this pressure, AMD has increased its sales of Epyc CPUs and Instinct GPUs for data centers.

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