Nvidia, Super Micro or Broadcom? Meet artificial intelligence (AI) split stocks, I think it’s the best buy and hold for the next 10 years.

It’s no secret that semiconductor stocks have been particularly big winners amid the artificial intelligence (AI) revolution. With stock prices skyrocketing, several major chip companies have opted for stock splits this year. Some AI chip stock splits you may recognize include Nvidia (NVDA -4.08%), Super Micro Computer (SMCI -6.79%)and Broadcom (AVGO -10.36%).

Indeed, each of these stocks has done wonders for many portfolios over the past 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 split stocks might be the best buy-and-hold opportunity for long-term investors.

1. Nvidia

Over the past couple of years, Nvidia has not only been the biggest name in the chip space, but has essentially become the ultimate indicator of AI demand in general. The company specializes in designing sophisticated chips known as graphics processing units (GPUs) and data center services. Furthermore, Nvidia’s Compute Unified Device Architecture (CUDA) provides a software component that can be used in conjunction with its GPUs, giving the company an enviable and profitable end-to-end AI ecosystem.

While this all looks great, investors can’t afford to be overlooked because of Nvidia’s existing dominance. The table below shows Nvidia’s revenue and free cash flow growth trends over the past few quarters.

Data source: Nvidia Investor Relations.

Of course, it’s hard to throw shade at a company that consistently delivers triple-digit revenue and profit growth. My concern with Nvidia isn’t about the level of 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 past few quarters. It’s fair to point out that the semiconductor industry is cyclical and a factor like this could influence growth in any given quarter. Unfortunately, I think there’s more under the surface with Nvidia.

Namely, Nvidia faces increasing competition from direct industry forces such as Advanced microdevicesand tangential threats from its customers — namely, adze, Metaand Amazon. In theory, as competition in the chip space increases, customers will have more options.

This leaves Nvidia with less leverage, which will likely diminish some of its pricing power. In the long run, this could have a considerable impact on Nvidia’s revenue and profit growth. For these reasons, investors may want to consider some alternatives to Nvidia.

Image source: Getty Images.

2. Super Micro Computer

Supermicro is an IT architecture company specializing in the design of server racks and other data center infrastructure. In recent years, growing demand for semiconductor chips and data center services has served as a benchmark for Supermicro. Moreover, the company’s close alliance with Nvidia has proven particularly beneficial.

That said, I do have some concerns with Supermicro. As an infrastructure business, the company relies heavily on the capital expenditure needs of other companies. This makes Supermicro’s growth susceptible to external variables such as demand for data center services, chips, server racks and more. In addition, Supermicro is far from the only IT architecture specialist on the market.

Competition from della, Hewlett Packardand Lenovo (to name a few) bring their own levels of expertise to the market. As a result of competing in such a commodity environment, Supermicro may be forced to compete on price — which affects profit generation.

Infrastructure businesses do not have the same margin profile as software companies, for example. Given that the company’s gross margins are quite low and declining, investors should be cautious. While Supermicro’s management has tried to reassure investors that the margin deterioration is the result of supply chain bottlenecks, more recent news may signal that gross margin is the least of the company’s concerns.

SMCI gross profit margin data (quarterly) by YCharts.

Supermicro was recently the target of a short report published by Hindenburg Research. Hindenburg claims that Supermicro’s accounting practices are flawed. Following the brief report, Supermicro responded in a press release noting that the company is postponing its annual filing to fiscal 2024.

Given the unpredictability of the demand outlook, a fluctuating margin and profit dynamic, and allegations regarding its accounting practices, I believe investors now have better options in the chip space.

3. Broadcom

Through the process of elimination, it’s clear that Broadcom is my top buy-and-hold pick among chip stocks right now. That’s not because Broadcom’s earnings this year have lagged behind its peers, however. The underlying reasons why Broadcom stock has paled in comparison to other chip stocks may shed some light on why I think its best days are ahead.

I see Broadcom as a more diversified business than Nvidia and Supermicro. The company operates in a number of growth markets, including semiconductors and infrastructure software. Grand View Research estimates that the total addressable market for systems infrastructure in the US was valued at $136 billion in 2021 and would grow at a compound annual growth rate of 8.4% between 2022 and 2030.

Systems infrastructure encompasses opportunities in data centers, communications, cloud computing, and more. As corporations of all sizes increasingly rely on digital infrastructure to make data-driven decisions, I see Broadcom’s role in network security and connectivity as a major opportunity and believe its recent acquisition of VMware is particularly smart and will help unlock new growth potential. .

AVGO Revenue Data (Quarterly) by YCharts.

If you look at the growth trends in the chart above, it’s obvious that Broadcom isn’t facing the same level of demand as Nvidia and Supermicro right now. I think this is because Broadcom’s position in the broader field of AI has yet to grow commensurately compared to buying chips and mass storage solutions.

While I’m not saying Nvidia or Supermicro are bad picks, I think their futures look murkier than Broadcom’s right now. I think Broadcom is in the very early stages of a new growth frontier with many different themes (with AI being just one of them). For these reasons, I think Broadcom is the best option explored in this paper, and I think long-term investors have a profitable opportunity to get the stock and hold well.