Broadcom shares rose nearly 3% on Thursday after the company predicted over $100 billion in AI chip sales next year. Signaling rapid share gains in the market originally dominated by Nvidia, Broadcom’s push to secure the vast computing power needed for artificial intelligence has lifted its shares in the data-center infrastructure race as it helps design custom processors that can serve as an alternative to Nvidia's costly chips.
Alphabet, Microsoft, Amazon and Meta are expected to spend more than $600 billion to build AI infrastructure this year. These investments are going to boost demand for chips, servers, storage and networking equipment.
Broadcom, which supplies semiconductors and infrastructure software, has visibility for about 10 gigawatts worth of AI demand in 2027 from its clients such as Anthropic and Meta Platforms, Melius Research analysts said.
This demand equates to the power consumption needs of more than 8 million U.S. households.
The volumes put Broadcom closer to the scale of recent AI chip deals by Nvidia and AMD (AMD.O), opens new tab, as the rise of custom processors, known as ASICs, increasingly threatens Nvidia's stronghold in the advanced data-center infrastructure market.
Thursday's jump could add over $42 billion to Broadcom's market value if gains hold.
See What’s Next in Tech With the Fast Forward Newsletter
Tweets From @varindiamag
Nothing to see here - yet
When they Tweet, their Tweets will show up here.
