Broadcom Inc. (AVGO) has seen a significant increase in its stock price of over 77% in the past year, reaching a market capitalization of around $655 billion. JPMorgan analyst Harlan Sur considers Broadcom to be the second-largest supplier of AI semiconductors globally, behind Nvidia Corp. (NVDA). Broadcom holds between 55% to 60% of the custom chip (ASIC) market share, worth an estimated $20 billion to $30 billion, with a growth rate exceeding 20% annually.
Sur predicts that Broadcom could achieve $11 billion in AI-related revenue by 2024, with the support of partnerships with Google and Meta Platforms Inc. The company has secured deals to work on Google’s TPUv7 and Meta’s third-generation AI chip, with the potential to generate billions in revenue for Broadcom in the coming years. Meta has also enlisted Broadcom to assist in designing its future AI processors, with plans set for deployment in the near future.
Despite these positive developments, reports have emerged that key supplier Taiwan Semiconductor Manufacturing Co. (TSMC) intends to increase its service prices, which could impact the margins of clients like Broadcom. Investors can access Broadcom through various exchange-traded funds like the Amplify Cybersecurity ETF (CUT) and Pacer Data and Digital Revolution ETF (TRFK).
In summary, Broadcom’s strong position in the custom chip market, particularly in AI semiconductors, has driven its stock price growth and revenue projections. Collaborations with tech giants like Google and Meta are expected to further boost Broadcom’s earnings in the years ahead. However, challenges posed by potential price hikes from key suppliers may impact the company’s profitability moving forward.
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https://www.benzinga.com/news/24/06/39211505/broadcom-rises-as-top-ai-chip-supplier-after-nvidia-thanks-to-google-and-meta-partnerships-analyst