Broadcom hits $1T market cap after CEO's 'huge' AI prediction

📆 12/13/2024 6:42 PM
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Tech,Artificial Intelligence,Nvidia

Big Tech’s push to diversify beyond Nvidia’s pricey and supply-constrained AI processors has been a windfall for Broadcom, which makes custom chips for major cloud companies.

Broadcom is predicting a massive expansion in demand for chips that power AI — and the market, for now, is buying it all the way.

Investors, meanwhile, scooped up the stock that trades at a lower multiple than rivals. Broadcom has a 12-month forward price-to-earnings ratio of 29.8, compared with 31.03 for Nvidia, the first chip firm to hit $1 trillion in market value, according to data compiled by LSEG. The gains eclipse those in major cloud companies, with Microsoft up about 11% this year and Alphabet — seen by analysts as Broadcom’s biggest custom chip customer — rising 40%.

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