Bernstein Analysts Remain Bullish on Nvidia and Broadcom Despite AI Pacing Debates

Bernstein analysts continue to express strong confidence in Nvidia and Broadcom, asserting that both AI semiconductor giants remain attractive investments despite ongoing discussions about slowing the development of advanced artificial intelligence models. In a Tuesday client note, the firm’s semiconductor research team, led by prominent analyst Stacy Rasgon, reaffirmed buy-equivalent outperform ratings for both companies, arguing they are significantly undervalued relative to their growth potential.

“We would still own both Nvidia and Broadcom,” the analysts wrote. “Both appear to have line of sight for strong growth even in a constrained environment, and both are extremely cheap.”

The firm set a price target of $575 for Broadcom, implying nearly 58% upside from its Tuesday closing price of $365. For Nvidia, Bernstein established a $400 target, representing a 75% gain from its recent close of $229. According to FactSet data, Nvidia is trading at 17 times forward earnings, well below its five-year average of 35 times, while Broadcom trades at 19.7 times versus a five-year average of 23 times. These multiples are comparable to the S&P 500’s current forward price-to-earnings ratio of approximately 19.56.

Rasgon noted that these low valuations could provide a buffer if AI sentiment weakens, though his team does not anticipate such a scenario. They highlighted multiyear revenue visibility and tight supply across the components required for AI infrastructure buildouts. The analysts pointed to Nvidia projecting over 70% growth into 2027 and Broadcom potentially doubling revenues in both 2027 and 2028.

While Nvidia continues to dominate with its graphics processing units (GPUs) for AI training, the rise of “agentic AI”—systems capable of autonomous task handling—is narrowing the traditional GPU-to-CPU ratio. This shift has renewed investor interest in CPU-centric stocks, exemplified by Meta’s recent launch of its Muse app for building agents. This trend has revived trading patterns seen earlier in the year, with investors piling back into companies like Arm and Intel.

The debate over AI safety and regulation gained traction after Anthropic CEO Dario Amodei published an essay advocating for coordinated pacing of AI model development and increased government oversight. During a recent interview with CNBC’s Jim Cramer, Nvidia CEO Jensen Huang and Broadcom CEO Hock Tan dismissed the need for regulatory intervention or coordinated slowdowns, insisting that demand remains robust. Tan stated he is not altering his forecasts, while Huang emphasized that companies can take the necessary time to ensure safety without external mandates.

Following conversations with major chipmakers including Intel, Bernstein updated its outlook, describing Nvidia’s data center opportunity as “enormous” and Broadcom’s AI trajectory as set to “markedly accelerate.” Notably, the firm became more positive on Intel, recognizing that server strength is helping the company recover, a shift from Rasgon’s historically negative stance on the stock.

Meanwhile, Cramer maintains a strong buy rating on Nvidia with a $280 price target, while holding a more neutral stance on Broadcom with a hold-equivalent rating and a $430 target. Cramer reduced his portfolio’s exposure to Broadcom in late August to mitigate risk amid political pressures but retains holdings in Nvidia, Broadcom, Intel, Alphabet, and Meta.