Applied Materials vs. Broadcom: Which Tech Stock Is a Better Buy in 2026?

As the demand for artificial intelligence infrastructure continues to accelerate, investors often weigh the merits of equipment providers against those of chip designers. Choosing between Applied Materials (NASDAQ:AMAT) and Broadcom (NASDAQ:AVGO) requires a close look at two very different roles in the global supply chain.

Applied Materials provides the essential tools used to fabricate advanced chips, while Broadcom designs specialized silicon and infrastructure software. They are being compared because both are vital players in the artificial intelligence build-out, though they operate at different stages of the production cycle. This comparison evaluates their financial health and market positioning.

Applied Materials sells the complex machinery that other companies use to build chips, serving major foundries and memory makers. The expansion of global data centers has kept semiconductor stocks at the center of many growth-focused portfolios. Applied Materials maintains a highly concentrated customer base, with two customers accounting for approximately 19% and 15% of net revenue in fiscal 2025. Customer concentration like this adds a layer of risk to the business, though it includes a deep partnership with Intel (NASDAQ:INTC) on next-generation manufacturing.

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