Broadcom Rides AI Wave: Stock Surges Amid Tech Giants' Infrastructure Investments

What's Going On With Broadcom Stock Friday? - Broadcom (NASDAQ:AVGO)

Broadcom Inc. AVGO is riding the artificial intelligence boom as soaring Big Tech investments in data infrastructure fuel demand for its custom chips and networking solutions, propelling the stock to strong year-to-date gains even as the company faces regulatory challenges in Europe. The custom chipmaker has surged 25% year-to-date, outpacing the NASDAQ Composite's 9% gain, as booming demand for its networking and Application-Specific Integrated Circuit (ASIC) businesses positions the chipmaker at the center of the AI-driven rally. More than $400 billion in planned AI infrastructure spending through 2026 from Microsoft MSFT, Meta Platforms META, Alphabet GOOGL GOOG, and Apple AAPL has created an unprecedented growth runway for suppliers like Broadcom. Also Read: Nvidia, Broadcom Lead Semiconductor Surge As AI Demand, Tariff Relief And Big Tech Investments Fuel Momentum That momentum has been further supported by the Trump administration's AI Action Plan and updated China trade policy, which reinforced U.S. leadership in semiconductors while opening new markets for chipmakers. Broadcom is seizing the opportunity with new products tailored for hyperscale AI workloads. Its recently launched Jericho4 ethernet fabric router, built on a 3nm process, delivers high-bandwidth, secure, lossless connectivity across data centers up to 100 kilometers apart. The platform interconnects more than one million XPUs and complements Broadcom's Tomahawk 6 and Tomahawk Ultra chips, targeting hyperscalers like Microsoft and Amazon.com AMZN. The company also plans to spotlight its AI and private cloud capabilities at VMware Explore 2025. Analysts see Broadcom as well-positioned to capture a meaningful slice of the accelerator market through ASIC adoption, even as Nvidia NVDA maintains a dominant share of the GPU segment. Bank of America Securities projects Broadcom could secure 10%-15% of the market long term, driven by rising AI compute and networking demand. But growth comes with challenges. EU judges are reviewing a CISPE lawsuit contesting the European Commission's approval of Broadcom's $61 billion VMware acquisition, alleging regulators overlooked competitive risks. Since closing the deal, Broadcom has raised VMware prices and tightened licensing, drawing pushback from European cloud providers. The legal battle threatens to complicate Broadcom's expansion in the region, even as VMware revenue bolsters its AI-driven growth story. Price Action: AVGO stock is trading higher by 0.73% to $291.72 premarket at last check Friday. Read Next: Why Nvidia's Data Center Dominance Is Untouchable Image via Shutterstock AVGOBroadcom Inc$291.500.66%Stock Score Locked: Want to See it? Benzinga Rankings give you vital metrics on any stock - anytime. Reveal Full ScoreEdge RankingsMomentum90.80Growth34.76Quality90.54Value9.47Price TrendShortMediumLongOverviewAAPLApple Inc$225.850.42%AMDAdvanced Micro Devices Inc$162.30-0.86%AMZNAmazon.com Inc$222.620.30%GOOGAlphabet Inc$202.991.18%GOOGLAlphabet Inc$201.901.08%METAMeta Platforms Inc$740.770.23%MSFTMicrosoft Corp$505.730.30%NVDANVIDIA Corp$173.08-1.09%Market News and Data brought to you by Benzinga APIs

Why Broadcom Stock Edged Higher on Friday | The Motley Fool

Chip company Broadcom (AVGO 1.52%) finished the trading week on a high, with its share price closing the day with a 1.5% gain. A price target raise from an analyst tracking the stock played a large part in that improvement. The company's rise essentially matched that of the S&P 500 (^GSPC 1.52%). That price target bump came from Piper Sandler's Harsh Kumar, who changed his fair-value assessment on Broadcom stock to $315 per share from the preceding $300. Kumar remains a Broadcom bull, as he maintained his overweight (i.e., buy) recommendation on the shares. The company is at the forefront of the artificial intelligence (AI) revolution, and has done well supplying this segment with its custom chips. According to reports, the analyst wrote in his latest update that the heavy demand for AI-suitable components will power the company's growth. He's currently modeling 60% year-over-year growth for Broadcom's key semiconductor business in the current quarter. On a slightly less positive note, its non-AI business is anticipated to be somewhat stagnant, although on the brink of a potential recovery. Another factor in Broadcom's Friday rise is the reconsideration of a worrying report on enterprise AI published Wednesday. This came from the Massachusetts Institute of Technology (MIT), which found that nearly all the businesses it analyzed were getting no tangible returns on their AI investments, despite the excitement around the technology. Technological advancements can only reach their potential when their users operate them properly. Since AI is relatively new to the general population, businesses could be in a phase when they are learning how to best leverage the new functionalities, and to pass along that knowledge to their workforce.