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Broadcom hit a market value of over $1 trillion for the primary time on Friday after the chipmaker posted huge gains in artificial intelligence revenue and forecast “massive” growth in the sphere.
Shares of the U.S.-based group rose 24 percent after it said late Thursday that its AI sales rose 220 percent in fiscal 2024.
The jump pushed its market capitalization to $1.05 trillion, joining only a handful of other firms, including chipmaker Nvidia, that were so highly valued.
“We see our opportunity in AI over the subsequent three years as enormous,” Hock Tan, the corporate’s chief executive, told analysts, discussing the investment plans of its largest customers. “For each of them, this represents a multi-year journey, not a quarterly one.”
The gains for Broadcom come at the top of a blockbuster yr for firms which are making the most of booming demand for high-end chips to fuel the fast-growing AI industry. Broadcom shares have doubled in 2024, but are still well behind industry leader Nvidia, which is up 170 percent.
Tan estimated Broadcom's addressable AI market could be between $60 billion and $90 billion by 2027, up from lower than $20 billion currently.
“We are thoroughly positioned to attain leading market share on this occasion,” Tan added, but cautioned that the increases wouldn’t be linear but would vary from quarter to quarter.
Analysts at JPMorgan Chase raised their price goal on the stock to $250 from $210, adding: “Even with a more conservative market share assumption, we will expect Broadcom's AI business to grow revenue in excess of 40-50% percent is growing (average annual rate). over the subsequent few years.” Shares were trading at $218 on Friday.
Leading AI firms like OpenAI have been searching for ways to cut back their reliance on Nvidia's cutting-edge technology and deepen their supply chains. “AI continues to be the frontrunner,” say analysts at Citigroup.
