Prediction: It's Not Too Late to Buy Broadcom Stock After Another Win for the Company
Broadcom has extended deals with Meta Platforms and Alphabet to develop custom AI chips, solidifying its position in the growing AI chip market. The company's custom chip business is expected to drive significant growth, with $100 billion in custom AI chip deliveries projected by 2027.
Broadcom continues to secure major deals in the AI chip market. The company has extended its partnership with Meta Platforms to develop custom AI chips, with an initial commitment of 1 gigawatt worth of chips through 2029. This deal is expected to be the start of a multi-generation custom chip roadmap. Broadcom has also extended its partnership with Alphabet to develop future Tensor Processing Units (TPUs). The company has $21 billion in TPU orders from Anthropic for this year and is on track to deliver $100 billion worth of custom AI chips by 2027. Broadcom's custom chip business is driving growth in its data center networking business, with its Tomahawk Ethernet being a leading switching solution. Hyperscalers are increasingly seeking alternatives to Nvidia's high-priced GPUs, and custom AI chips are becoming a preferred option.
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