Amid the ongoing rapid digitalization, the demand for semiconductors increases exponentially because of their need to run advanced electronic devices and electric vehicles. This, along with supply shortage, leads to rising prices of semiconductor chips. As a result, Broadcom (NASDAQ:AVGO) and Advanced Micro Devices (NASDAQ:AMD) should benefit in the near term. But which of these two stocks is a better buy now? Read more to find out.Broadcom Inc. (AVGO) designs, develops and supplies semiconductor infrastructure software solutions. It operates through two segments, Semiconductor Solutions; and Infrastructure Software. On the other hand, Advanced Micro Devices, Inc. (AMD) operates as a semiconductor company worldwide. The company operates in two segments, Computing and Graphics; and Enterprise, Embedded, and Semi-Custom.
Even though the ongoing global semiconductor shortage has impacted several industries, the semiconductor industry has been thriving due to the rising prices of chips. While huge investments are helping semiconductor manufacturers increase production, the supply shortage may not end anytime soon. Increased demand for chips, primarily from consumer electronics and automotive industries, should keep driving the industry’s growth. According to a Fortune Business Insights report, the global semiconductor market is projected to grow at a CAGR of 8.6% between 2021 and 2028. Therefore, both AVGO and AMD should benefit.
AMD has gained 6.2% over the past month, while AVGO has returned 5.6%. Also, AMD’s 32.7% gains over the past three months are significantly higher than AVGO’s 18.9% returns. Moreover, AMD is the clear winner with 78.1% gains versus AVGO’s 27.3% returns in terms of the past six months’ performance.