Broadcom reaches $1 trillion market cap with strong growth in AI chip market

From NASDAQ: 2024-12-16 08:00:00

Chipmaker Broadcom has reached a $1 trillion market cap, becoming the ninth U.S. company to do so. The surge followed CEO Hock Tan’s AI revenue expansion predictions of $60-90 billion by 2027. With a 107% stock jump this year, Broadcom aims to be a key player in the AI chip market.

Broadcom’s partnership with major hyper-scalers and projected $12.2 billion AI revenue in 2024 have analysts divided. TD Cowen predicts up to $50 billion in AI sales by 2027, while Rosenblatt Securities projects a 20-50% market share. Broadcom’s optimistic projections position it as a significant player in the AI chip market.

Broadcom, slightly less pricey than NVIDIA, is benefiting from Big Tech’s demand for AI chip suppliers. Cloud providers like Microsoft and Meta are driving growth, with Alphabet as Broadcom’s largest custom chip customer. Analysts expect stiff competition from NVIDIA in merchant silicon and enterprise customers.

Broadcom’s strong financial performance led to an 11% increase in its quarterly dividend for fiscal 2025, marking the fourteenth consecutive annual increase. With a presence in dividend-based ETFs like SPDG and TDIV, investors can enjoy capital gains and steady income. ETFs yield between 2.10% to 8.25% annually.



Read more at NASDAQ: Broadcom Hits $1T Market Cap: Are Broadcom ETFs the Next NVIDIA?