TLDR
- Goldman Sachs continues recommending Broadcom and Nvidia as best AI chip investments amid growing competition from custom processors
- Google’s TPU v7 cuts inference costs by 70% compared to previous version, reaching cost parity with Nvidia’s GB200 NVL72
- Nvidia maintains market edge through faster product launches and dominant CUDA software platform for developers
- AMD and Amazon Trainium chips deliver only 30% cost improvements, placing them behind Nvidia and Google offerings
- Goldman’s inference cost curve analysis examines GPU versus ASIC performance as AI infrastructure spending accelerates
Goldman Sachs continues to rank Broadcom and Nvidia as the strongest investment opportunities in AI computing hardware. The bank’s latest research examines how different chip makers stack up as competition intensifies.
The analysis comes as investors question whether traditional GPUs will maintain dominance over custom-designed chips. Goldman created a detailed cost comparison framework to evaluate vendor performance.
Google and Broadcom’s tensor processing unit shows rapid improvement in cost efficiency. The latest TPU v7 reduces cost per token by roughly 70% versus the TPU v6.
This advancement brings the TPU v7 to the same cost level as Nvidia’s GB200 NVL72. In some metrics, the TPU v7 slightly exceeds Nvidia’s performance on a cost basis.
The findings demonstrate how quickly specialized AI chips are advancing. Custom silicon designed for specific workloads continues gaining ground against general-purpose processors.
Why Nvidia Maintains Its Lead
Nvidia holds two critical advantages that protect its market position. The company ships new chip generations faster than rivals can release competing products.
This speed to market keeps Nvidia ahead of the technology curve. Customers gain access to the latest performance improvements before alternatives become available.
Nvidia’s CUDA software ecosystem represents the second major competitive barrier. Enterprise buyers depend on CUDA’s extensive tools and frameworks.
The platform offers mature development environments that reduce implementation costs. Switching to alternative chips requires rebuilding software infrastructure.
These switching costs help retain existing customers even as competing chips improve. The CUDA moat remains particularly strong in enterprise markets.
AMD and Amazon take different approaches with their AI accelerators. Both companies offer chips targeting specific use cases in cloud computing.
However, their solutions show smaller performance gains than competitors. AMD and Amazon chips achieved approximately 30% cost reductions from prior versions.
This trails the improvements seen in Nvidia and Google products. The performance gap keeps both vendors behind the market leaders.
Broadcom Benefits from Multiple Trends
Goldman highlights Broadcom’s exposure to several growth drivers in AI infrastructure. The company’s work with Google on TPU development creates direct revenue opportunities.
As TPUs gain adoption, Broadcom captures increasing chip design and production revenue. The partnership positions Broadcom at the center of custom silicon growth.
Broadcom also benefits from AI networking infrastructure demand. High-performance AI models require advanced interconnect technology for data movement.
The company provides networking chips that handle communication between processors. This creates a second revenue stream beyond compute chips themselves.
Goldman based its stock preferences on AI infrastructure spending patterns. Both Broadcom and Nvidia connect to capital expenditure that appears sustainable.
The bank examined four different scenarios for AI technology evolution. Each pathway was analyzed for impact on chip vendor positioning.
AMD stock currently trades at a P/E ratio above 121 according to market data. The company reported over 31% revenue growth in the past year.
Analysts project AMD revenue will expand by 32% in the current fiscal year. The stock posted gains exceeding 90% over a twelve-month period.
Wells Fargo recently named AMD as a top 2026 stock pick. RBC Capital started coverage with a $230 price target.
