Broadcom Emerges as Strong Contender in AI Chip Market, Challenging Nvidia's Dominance

This chipmaker is the 'no. 2' player behind Nvidia, Oppenheimer says

Broadcom just got an upgrade before its earnings due next week. Oppenheimer analyst Rick Schafer reiterated his outperform rating and lifted his price target on Broadcom shares by $20 to $325 ahead of the chipmaker's earnings report on Sept. 4. His new target suggests shares could gain about 8.2% from Monday's close. Shares of Broadcom have gained about 29.5% this year driven by growth in AI-related revenue, strong customers for its hardware and ongoing market support for the tech sector. The analyst said Broadcom remains the "no. 2 AI franchise" after Nvidia , given its leadership in the AI ASIC, or Application-Specific Integrated Circuit, market. These custom-designed microchips are tailored towards AI tasks and are optimized for higher efficiency, speed and specialization. "We see upside to F3Q (July) results and F4Q (Oct.) outlook. Growth continues to be led by AI compute/networking franchises ( > 50% Semi segment). AVGO is the top maker of custom AI ASICs with seven announced projects led by GOOG, META, ByteDance USA. Mgmt. sees top hyperscalers utilizing custom AI ASICS to optimize frontier LLMs," Schafer wrote in a note to clients. "We remain long-term buyers," he continued, adding that the company's core businesses in networking, wireless, broadband, server and storage, and software all support "sustainable growth and cash return." The analyst pointed to Broadcom's projects with several high-profile clients -- which include Google, Meta, OpenAI, Apple -- that remain a tailwind for the company's growth. AVGO 1Y mountain Broadcom stock performance. To be sure, analysts polled by LSEG have a consensus price target on Broadcom that suggests about 0.5% downside, suggesting the stock could be overvalued. Of the 43 analysts covering the name, 12 rate it a strong buy while 29 have a buy rating on the name, per LSEG.

What Is Going On With Broadcom Stock Thursday? - Broadcom (NASDAQ:AVGO)

Broadcom Inc. AVGO shares rose Thursday after Nvidia Corp. NVDA delivered strong quarterly results that reinforced investor confidence in the AI-driven demand cycle. Nvidia late Wednesday delivered earnings that far exceeded expectations, underscoring relentless demand for AI chips. On Wednesday, Nvidia CEO Jensen Huang confidently rebuffed fears of a slowdown in AI chip investment, stating that a multi-trillion-dollar market opportunity will unfold over the next five years. Also Read: Broadcom's AI Push Gains Speed With Microsoft, Meta, And Apple Pouring Billions Into Data Infrastructure His comments, reported by Reuters, come amid intense investor scrutiny over the sustainability of the recent spending boom on artificial intelligence. For its fiscal second quarter, Nvidia reported revenue of $46.74 billion, a 56% year-over-year increase, surpassing Wall Street's $46.02 billion estimate. Adjusted earnings per share came in at $1.05 versus the expected $1.01, while adjusted gross margin reached 72.7%, highlighting the company's pricing strength. Data Center revenue surged to $41.1 billion, also up 56% sequentially, driven by demand for its Blackwell AI platform. Although Nvidia booked no sales of its H20 chip to China during the quarter, it released $180 million in H20 inventory to a customer outside the region. The company also authorized a $60 billion stock buyback. For third-quarter, Nvidia expects revenue between $52.92 billion-$55.08 billion (versus $52.96 billion consensus) and adjusted gross margins around 73.5% ±50bps implying continued momentum in the industry. The company expects to end 2025 with gross margins in the mid-70% range. Broadcom, which supplies custom chips and networking solutions critical to the data infrastructure powering AI, has gained more than 30% year-to-date. Investor optimism has been bolstered by rising AI outlays from Microsoft MSFT, Meta Platforms META, Apple AAPL, and other major technology firms. Nvidia's strong results have continued to fuel that momentum. Broadcom has also expanded its collaboration with Nvidia, integrating Blackwell GPUs, NICs, and DPUs into VMware Cloud Foundation in an effort to deliver faster networking and enhanced AI training capabilities for enterprise private clouds. Wall Street remains constructive on Broadcom's outlook. According to 29 analysts, the stock carries a consensus price forecast of $344.32. Recent ratings from UBS, Piper Sandler, and Goldman Sachs averaged $333.33, suggesting a potential upside of about 10%. Price Action: AVGO stock is trading higher by 2.72% to $308.43 at last check Thursday. Read Next: Oracle Doubles Down On AI With New Health Platforms Photo by Tada Images via Shutterstock AVGOBroadcom Inc$307.772.50%Stock Score Locked: Edge Members Only Benzinga Rankings give you vital metrics on any stock - anytime. Unlock RankingsEdge RankingsMomentum91.88Growth34.75Quality89.06Value9.73Price TrendShortMediumLongOverviewAAPLApple Inc$230.560.03%METAMeta Platforms Inc$749.140.24%MSFTMicrosoft Corp$506.20-0.11%NVDANVIDIA Corp$178.27-1.83%Market News and Data brought to you by Benzinga APIs

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.

Why Broadcom Stock Beat the Market Today

Hardly for the first time in this "year of the chip stock" on the back of eager artificial intelligence (AI) adoption, Broadcom (AVGO +0.03%) was the subject of an analyst's price target raise on Thursday. This was compounded by the disappointment about a peer company's recent performance, resulting in some investors fleeing to Broadcom. Ultimately, Broadcom stock closed Thursday's trading session nearly 3% higher, easily trouncing the S&P 500 index's 0.3% increase. Thursday's Broadcom booster was Oppenheimer's Rick Schafer, who upped his fair value assessment on the company to $325 per share. That was a bit of distance up from his preceding $305. In making that change he maintained his outperform (buy, in other words) recommendation on the shares. It's no coincidence that Schafer's updated take came one week before the company is scheduled to post its third-quarter results. His new analysis addressed both that quarter and the following frame, according to reports, with Schafer predicting that both will be impressive given the monster appetite for artificial intelligence (AI) solutions. One of Broadcom's major appeals these days is its expertise in application-specific integrated circuits (ASICs), essentially custom chips for advanced functionalities like AI. Schafer pointed out that the company is a leader in this product category. On Thursday, Broadcom also benefited from the fact that it is not Nvidia. The chip giant stumbled that day, tripped up by a second quarter of fiscal 2026 earnings report that left many investors disappointed. It's likely more than a few of these folks defected to Broadcom as a better play on AI processing hardware.

Should You Buy Broadcom Stock Before Sept. 4? Here's What History Shows.

Say goodbye to high-interest charges with 0% intro APR for 21 months on both purchases and balance transfers -- that's one of the longest no-interest periods available today. It may come as a surprise to some investors that Broadcom (AVGO +0.03%) plays a crucial role in technology. The company provides a wide array of products that underpin tech infrastructure, and the rapid adoption of artificial intelligence (AI) has played to Broadcom's strengths. Shareholders have profited from its response to this paradigm shift in technology, which has fueled an increase in both revenue and profits, sending the stock on a blistering run higher. Over the past three years, Broadcom has gained 442% (as of this writing), while increasing 79% over the preceding 12 months. Broadcom is scheduled to report its fiscal 2025 third-quarter results after the market close on Thursday, Sept. 4, marking a critical juncture for the company. Given the stock's relentless run over the past year, should investors buy the stock ahead of the results in hopes of additional gains, or wait until after the report is made public? Let's take a look back at history to see what we can learn. Broadcom is primarily known for its semiconductor business, but that sells the company far short. It offers a diverse range of software, semiconductor, and security products that serve the mobile, broadband, cable, and data center spaces. On Broadcom's website, the company boasts that "99% of all internet traffic crosses through some type of Broadcom technology." The advancements resulting from generative AI marked a turning point for the company, as this groundbreaking technology increased the demand for Broadcom's data center products and expertise. The company's application-specific integrated circuits (ASICs) are custom-designed to reduce energy consumption in the processing of AI workloads, which has become a key consideration for data center operators and cloud infrastructure providers alike. Add in the company's networking solutions, and the appeal is clear. The AI revolution has been a boon to Broadcom. In the second quarter (ended May 4), the company generated revenue that climbed 20% to $15 billion, resulting in adjusted earnings per share (EPS) that jumped 44% to $1.58. Management left no doubt that the impressive growth was fueled by increasing demand for AI, as AI-related revenue soared 46% to $4.4 billion, marking its ninth successive quarter of growth. The company also noted that while revenue from AI chips rose by double digits, sales of AI networking solutions surged 70%. Broadcom expects its AI-fueled growth to continue. For the third quarter, management is forecasting revenue of $15.8 billion, representing 21% growth, and adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) of approximately $10.43 billion, a 27% increase. Let's not forget Broadcom's modest dividend, though it has taken a back seat to the company's impressive capital gains. Shareholders are paid $0.59 per share per quarter, which works out to a yield of about 0.8%. Given its payout ratio of 63% and fast-growing profits, Broadcom appears poised to add to its 15 consecutive years of dividend increases. The chart illustrates Broadcom's stock price movements over the past three years. The blue circles with the letter E at the center signify when the company reported its financial results. In the majority of these instances, or 58% of the time, the stock price rose as investors piled into the stock following the earnings announcement. Many of these moves higher were fueled by better-than-expected results, increases to Broadcom's full-year forecast, and excitement about the state of AI. Yet even in those instances when the results were initially panned, investors considered the company's strong track record of growth, consistent execution, and pivotal role in the tech space before reversing course and bidding the stock higher. To be clear, there's no way of telling how investors will react on a particular day, which is why I don't generally recommend date-driven investing. Furthermore, while sentiment tends to drive stocks over the short term, it's operational and financial performance that fuel long-term gains, and Broadcom's track record is clear. Wall Street is also bullish on Broadcom's prospects. Of the 42 analysts who have offered an opinion in August, 39 -- or a whopping 93% -- rate the stock a buy or strong buy, and only one recommends selling. HSBC analyst Frank Lee recently became the biggest Broadcom bull, upgrading the stock to buy, while assigning a Street-high price target of $400. This represents potential upside of 36% compared to the stock's closing price on Monday. The analyst cites Broadcom's critical role in AI infrastructure as a catalyst, saying he expects the company's growth to continue accelerating over the next 24 months as additional hyperscale operators adopt its customized AI chips. At 36 times next year's expected earnings, Broadcom is selling for a premium. However, a quick look at Broadcom's chart shows that it's clearly deserved. During the past five- and 10-year periods, the stock has increased by 788% and 2,650%, respectively. This suggests that it doesn't matter when you buy Broadcom stock, as long as you do.

Prediction: 1 Top Artificial Intelligence (AI) Semiconductor Stock to Buy Before Sept. 4

Say goodbye to high-interest charges with 0% intro APR for 21 months on both purchases and balance transfers -- that's one of the longest no-interest periods available today. Broadcom (AVGO +0.03%) has been a big winner of the booming demand for artificial intelligence (AI) chips in the past year. Shares of the chip designer shot up 89% during this period, and that solid rally seems justified in light of the company's improving growth profile owing to its dominant position in the market for custom AI chips. The company is set to release its fiscal 2025 third-quarter results on Sept. 4, and it won't be surprising to see the stock get a nice shot in the arm once it releases its report. Let's look at the reasons why it may be a good idea to buy Broadcom stock before its upcoming results. Broadcom's earnings per share exceeded consensus estimates in each of the past four quarters. Investors can expect the company to deliver a market-beating performance once again, thanks to a couple of reasons. First, tech giants are expected to spend more money on AI infrastructure than previously estimated. As pointed out by Yahoo! Finance, AI spending by big tech companies -- Amazon, Microsoft, Alphabet, and Meta Platforms -- is expected to hit $364 billion in 2025, up by $39 billion from the original estimate. The new estimate points toward an increase of 63% in AI spending this year by the big tech giants, up from the 59% increase witnessed last year. This stronger spending bodes well for Broadcom, especially considering that big tech companies are focusing on developing more in-house chips for their data centers. This brings us to the second reason why Broadcom could deliver another quarter of better-than-expected results. Big tech companies are increasingly investing in custom AI processors for their data centers to reduce operational costs. This was the reason why investment bank UBS recently suggested that Broadcom is on track to exceed expectations when it releases its results and also raised its price target to $345 from $290. According to UBS, Broadcom could get a boost from the stronger-than-expected production ramp of Google's custom AI processors. The investment bank is expecting the demand for Google's latest TPU (tensor processing unit) to jump by over 50% in 2025, and that could fuel a 60% increase in Broadcom's AI revenue this year. Broadcom is already designing custom AI processors for Google, Meta, and ByteDance. Even better, the company is engaged with another four hyperscale customers for designing their custom AI processors. Reports indicate that these four customers could be xAI, OpenAI, Arm Holdings, and Apple. So, the chances of Broadcom delivering better-than-expected results once again are quite solid thanks to stronger demand from current customers, as well as the potential ramp from new customers. Analysts expect Broadcom to end the current fiscal year with almost $63 billion in revenue, which would be a 22% increase from the year-ago period. The company is on track to record AI-specific revenue of $13.6 billion in the first three quarters of the fiscal year, which translates into an annual run rate of just over $18 billion. Looking ahead, Broadcom estimates its potential revenue opportunity from its first three custom AI chip customers to land between $60 billion and $90 billion in fiscal 2027. That opportunity could be much bigger when we take into account the new customers that the company is expected to bring on board. As such, Broadcom seems to be on track to continue outperforming the market's expectations over the next three years since its AI business alone could be enough for it to crush Wall Street's revenue estimates in fiscal 2027. Importantly, Broadcom's 70% share of the custom chip market means that it is in a terrific position to capitalize on the huge end-market opportunity. All this makes Broadcom a top AI stock to buy and hold for the long run and doing that before its upcoming earnings report could be a smart move, since it could soar higher after Sept. 4.