Newsletter
Broadcom became the latest company to join the $1 trillion market cap club on Friday, as the artificial intelligence wave continues to broaden out.
What matters: Broadcom is widely known for making bespoke AI chips for large tech companies like Google, Meta Platforms, Bytedance, and more. Most recently, they signed a deal with Apple to supply chips for Apple’s AI server infrastructure.
Beyond chips, Broadcom also runs a robust software infrastructure business, which includes giants like VMware, which the company acquired a while back for a record $69 billion.
What’s driving Broadcom’s business:
- Software sales nearly tripled to $5.8B while semiconductor sales rose 12% to $8.2B
- AI revenue exploded 220% last year to $12.2B, surpassing the initial $10B target—a sign that demand scales faster than wall street can keep up
Broadcom’s stock grew nearly 24% on Friday, adding $200 billion+ to its market cap, in what would be the biggest single-day surge since the 2009 IPO.
Bottomline: While Nvidia has been lauded as the winner of the AI chip boom, Big Tech’s appetite to make their own silicon could be a game-changer, and if it catches wind, Broadcom is at the forefront of that ~trillion dollar market.
Zoom out: nearly $220 billion will be spent by Meta, Microsoft, Amazon, and Alphabet on capital expenditures this year too, mostly on AI infra. Beyond Nvidia, there’s more beneficiaries (like Broadcom) emerging.
