Microsoft vs. Broadcom: One Has 85% Upside, But I'm Picking the Other Rick Orford Fri, August 21, 2026 at 4:00 PM PDT 5 min read MSFT AVGO Microsoft headquarters By Peter With an AI market that's still this hot, I can't really blame investors when they start pitting different companies against each other like some battleboarding forum. One of the most common matchups I'm seeing is between Microsoft (MSFT) and Broadcom (AVGO). And you know what's funny? More News from Barchart Get exclusive insights with the FREE Barchart Brief newsletter. Subscribe now for quick, incisive midday market analysis you won't find anywhere else. While both companies have a seat at the top of the tech industry, they're on different sides of the table. In fact, I'd go as far as to say that they're on different tables altogether. But that does beg the question: Just how different are these two titans - and which one offers the better growth opportunity for investors moving forward? Let's take a look. Microsoft vs. Broadcom: How Do Their AI Business Models Differ? First, let's see how these companies operate. Microsoft is a diversified tech company that makes its money on software, cloud infrastructure, and productivity tools. The company's been around a while, and some of its early tech products, like MS DOS, were instrumental during the personal computing boom in the 80s. Today, the story is roughly the same, but on a much larger scale. Like its earlier days, the company sells licenses to operating systems (Windows 11) and productivity suites (Microsoft 365). Microsoft also owns and operates Azure, a cloud computing platform that rents out power, data storage, and digital tools to retail and commercial customers. This is arguably the company's biggest growth driver right now, since it puts it near the center of AI infrastructure demand. Any company building, training, or running an AI model needs somewhere to actually do that work, and Azure is one of a small number of platforms with the scale and reliability to handle it. On the other side of the ring, we have Broadcom, a fabless semiconductor company. Before the AI boom, it was known for connectivity products like switches, routers, and wireless components for Wi-Fi and Bluetooth. And a big part of Broadcom's early success came from becoming Apple's (AAPL) primary supplier of wireless chips. That makes a nice parallel to what the company is doing now. Instead of offering servers and compute power like Microsoft, Broadcom sits deeper in the AI stack by selling custom-designed AI chips known as application-specific integrated circuits (ASICs) - the chips that many hyperscalers need to build the AI accelerators and networking gear inside their data centers. Story Continues Now, Broadcom's not exactly a direct competitor to NVIDIA's (NVDA) GPU accelerators. Instead, it's better to think that Broadcom fills the gaps that NVIDIA's chips aren't suited for. So in this matchup, I'd say Microsoft is the landlord offering that swanky high-rise condominium for rent, while Broadcom is the one...
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