Nvidia Corp. (NASDAQ:NVDA) and Broadcom Inc. (NASDAQ:AVGO) just landed on Morningstar’s latest "Cheap Stocks to Buy" list, putting two of the market’s premier AI chip names in the unusual position of being labeled bargains rather than bubble plays.
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Wide-Moat AI Leaders on Sale
Morningstar classifies both Nvidia and Broadcom as wide-moat businesses, reflecting durable competitive advantages in chip design, software and ecosystem lock-in.
For Nvidia, the moat is built on its dominance in GPUs, CUDA software and high-speed networking that power the current wave of generative AI buildouts.
Broadcom’s moat leans more on proprietary chip architectures and sticky enterprise and telecom software, reinforced by switching costs and long-term customer relationships.
Crucially, Morningstar argues that the market is underpricing that moat strength. Nvidia, a core holding on its "best AI stocks to buy now" screen, is flagged as roughly 30% undervalued versus Morningstar’s fair value estimate of $280 per share.
Broadcom looks even cheaper on that framework, with shares trading more than 40% below a $650 fair value estimate tied to its AI accelerator and networking opportunity.
Broadcom: Custom AI silicon at a Discount
Broadcom’s recent share pressure has been driven by investor anxiety around Google’s TPU roadmap and perceived competition from rival chip vendors.
Morningstar’s take is that those fears are overdone. Broadcom has secured long-term agreements with Alphabet and is shipping custom AI silicon at scale to multiple hyperscalers, including OpenAI, alongside a diversified base of cloud and enterprise customers.
On the numbers, Broadcom is guiding explosive AI chip revenue growth and still trades at a steep discount to intrinsic value, even as other AI hardware suppliers command premium multiples.
Layer in its VMware-driven software franchise and recurring infrastructure revenues, and Morningstar sees current pricing as an attractive entry point into a broad AI infrastructure and networking story rather than a narrow Google-dependent bet.
Nvidia: Still The AI King
Nvidia’s stock has cooled from its euphoric peaks, but Morningstar argues the market is underestimating how long AI demand can stay "insatiable," as described by CEO Jensen Huang.
The company remains the go-to supplier for data-center GPUs, full-stack AI systems, and related software tools, with visibility into multi-year orders for its Blackwell and Rubin platforms.
Revenue growth is broad-based across hyperscalers, enterprise, and emerging AI workloads, while margins sit at levels most chipmakers can’t touch.
That mix leads Morningstar to a wide-moat rating and a valuation call that paints Nvidia as a surprisingly cheap way to play AI, not an overhyped momentum relic.
The Bottom Line
Between Nvidia’s compute leadership and Broadcom’s position in custom accelerators, networking and software, Morningstar’s "cheap stocks" list highlights a rare window where two of the AI cycle’s leaders are trading meaningfully below long-run value estimates.
NVDA, AVGO Stock Price Activity: Broadcom stock was up 2.4% at $398.00 and Nvidia shares were down 1.22% at $201.69 at the time of publication Thursday, according to Benzinga Pro data.
Photo: M-SUR / Shutterstock
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