Nvidia Shares closed down more than 1% on Tuesday Broadcom Stocks reversed earlier gains to move lower as well.
On Monday, Nvidia entered correction territory — broadly defined as the point at which the stock falls 10% or more from its all-time closing high.
Nvidia reached its closing high of $148.88 last month.
After an initial surge in trading before the bell, Broadcom shares closed 4% lower.
However, over the past five days, the two names have been on divergent paths with Broadcom shares rising while Nvidia shares fell.
The bullish trend around Broadcom was driven by the company's release last week of fiscal fourth-quarter earnings that beat expectations and a revenue outlook for the current quarter that beat expectations. A number of Wall Street brokers, including Goldman Sachs, have raised their price targets on Broadcom shares recently.
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Broadcom shares are up more than 120% this year so far, while Nvidia stock has added more than 160% over the same period.
Nvidia's graphics processing units, or GPUs, have proven very popular as the silicon of choice for training large AI models, such as those developed by OpenAI.
Broadcom's specialty is custom AI chips that the company develops for hyperscalers, which are large cloud computing companies.
“We see our opportunity over the next three years in AI as enormous,” Broadcom CEO Hock Tan told investors during the company's earnings call last week. “Some hyperscalers have begun their journey to develop their own custom AI accelerators.”
Correction: This article has been updated to more accurately reflect Hock Tan's quote about superscale activity.
