Broadcom Unveils New Chip for AI Data Centers
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Mar 11 2026
0mins
Should l Buy AVGO?
Source: Benzinga
- New Chip Launch: Broadcom has introduced the Taurus BCM83640 chip, which supports 1.6-terabit data modules, effectively doubling network capacity in data centers to meet the rising traffic demands of AI applications.
- Cooling Technology Partnership: In collaboration with JetCool and Flex, Broadcom is developing a cooling system that delivers liquid directly to chips to manage the heat generated by powerful AI processors, ensuring efficient operation of data centers.
- Strong Earnings Report: Broadcom reported fiscal Q1 revenue of $19.31 billion, a 29% year-over-year increase, with AI-related revenue soaring 106% to $8.4 billion, indicating robust market demand and driving stock price gains.
- Analyst Upbeat Outlook: Several analysts have raised their price targets for Broadcom, with JPMorgan increasing its target from $475 to $500 and Goldman Sachs from $450 to $480, reflecting confidence in Broadcom's future growth prospects.
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Analyst Views on AVGO
Wall Street analysts forecast AVGO stock price to rise
30 Analyst Rating
29 Buy
1 Hold
0 Sell
Strong Buy
Current: 310.510
Low
370.00
Averages
457.75
High
525.00
Current: 310.510
Low
370.00
Averages
457.75
High
525.00
About AVGO
Broadcom Inc. is a global technology firm that designs, develops, and supplies a range of semiconductors, enterprise software and security solutions. The Company operates through two segments: semiconductor solutions and infrastructure software. Its semiconductor solutions segment includes all of its product lines and intellectual property (IP) licensing. It provides a variety of radio frequency semiconductor devices, wireless connectivity solutions, custom touch controllers, and inductive charging solutions for mobile applications. Its infrastructure software segment includes its private and hybrid cloud, application development and delivery, software-defined edge, application networking and security, mainframe, distributed and cybersecurity solutions, and its FC SAN business. It provides a portfolio of software solutions that enable customers to plan, develop, automate, manage and secure applications across mainframe, distributed, mobile and cloud platforms.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
Broadcom Positioned to Thrive Amid AI Boom
- Surge in AI Revenue: Broadcom's AI revenue exceeded $8.4 billion in Q1 2023, more than doubling year-over-year, indicating significant benefits from the surge in AI infrastructure spending, with expectations to reach $10.7 billion in Q2, showcasing robust market demand.
- Profitability Enhancement: The company's non-GAAP earnings per share jumped 28% to $2.05, reflecting strong performance and profitability in the AI sector, further solidifying its leadership position in the semiconductor industry.
- Expanding Market Share: According to CounterPoint Research, Broadcom's market share in AI ASIC processors is expected to reach 60% by next year, allowing it to capture a larger portion of the ongoing AI spending surge and enhancing its competitive advantage.
- Long-term Investment Outlook: Despite uncertainties surrounding future AI spending, Broadcom's growth potential and market position make it a solid long-term investment choice, with investors advised to monitor shifts in AI expenditure to adjust their strategies accordingly.
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- Bond Yields Decline: The 10-year Treasury yield fell from an 8-month high of 4.44% to 4.33%, providing support for equities as concerns over inflation pressures eased, which could influence future monetary policy decisions by the Federal Reserve.
- Mixed International Market Reactions: While US markets surged, European markets showed mixed results, with the Eurozone consumer confidence index dropping to a nearly 2.5-year low of -16.3, indicating economic uncertainty that may affect future investment strategies.
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- Overall Financial Performance: The company reported total revenue of $19.31 billion for the quarter, a 29% increase year-over-year, with diluted earnings per share (EPS) at $1.50, up 32% from Q1 2024, indicating a strong overall financial health.
- Significant Customer Orders: Broadcom's partnership with Anthropic has deepened, with the latter placing an additional $11 billion order for TPUs after a previous $10 billion order, aiming to add 1 million TPU chips by 2026, which will further drive Broadcom's revenue growth.
- Strategic Partnerships: Beyond designing TPUs for Google, Broadcom collaborates with companies like OpenAI, highlighting its critical role in the AI hardware landscape and reinforcing its status as an
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- AI Revenue Surge: Broadcom's AI revenue more than doubled in Q1 2026, reaching $8.4 billion, reflecting a robust growth trajectory in the AI hardware sector that solidifies its market position.
- Total Revenue Growth: The company's total revenue for the quarter was $19.31 billion, a 29% increase from Q1 2025, indicating strong performance across multiple business segments and boosting investor confidence in its future prospects.
- Strong Profitability: Broadcom reported diluted earnings per share (EPS) of $1.50, up 32% year-over-year, with a net profit margin of 36.57%, showcasing its excellence in cost control and profitability enhancement.
- Strategic Partnerships: The collaboration with Google on TPU and significant orders from Anthropic worth $10 billion and $11 billion highlight Broadcom's critical role in AI chip design, with potential for further market share expansion in the future.
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- Positive Market Reaction: Following the announcement, Tower Semiconductor's stock rose by 4.39%, peaking at an 11% increase early in the day, indicating investor optimism regarding the commercialization prospects of this new technology and reflecting market confidence in its growth potential.
- Enhanced Competitive Position: If successfully commercialized, Tower Semiconductor will join a select group of companies, including Broadcom and Lumentum, capable of supplying high-speed networking solutions for the AI data center industry, thereby strengthening its position in this rapidly evolving market.
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- Positive Industry Outlook: Bernstein analyst highlights that despite a sell-off in AI stocks this year, demand for AI remains strong, with projections for Broadcom and Nvidia's 2025 profits potentially reaching $20 and $12 per share, respectively, indicating a bullish trend for the semiconductor sector.
- Supply Chain Impact: As profits soar for Broadcom and Nvidia, third-party contractors like TSMC will have more capital to invest in ASML's machines, thereby driving ASML's sales growth further up the supply chain.
- Earnings Expectations: Although ASML's price-to-earnings ratio stands at 46.5, suggesting it is not cheap, analysts anticipate a 19% annual earnings growth over the next five years, and if AI chip demand continues, ASML's stock could rise rapidly, presenting a buying opportunity for investors.
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- Surge in AI Revenue: Broadcom's AI revenue exceeded $8.4 billion in Q1 2023, more than doubling year-over-year, indicating significant benefits from the surge in AI infrastructure spending, with expectations to reach $10.7 billion in Q2, showcasing robust market demand.
- Profitability Enhancement: The company's non-GAAP earnings per share jumped 28% to $2.05, reflecting strong performance and profitability in the AI sector, further solidifying its leadership position in the semiconductor industry.
- Expanding Market Share: According to CounterPoint Research, Broadcom's market share in AI ASIC processors is expected to reach 60% by next year, allowing it to capture a larger portion of the ongoing AI spending surge and enhancing its competitive advantage.
- Long-term Investment Outlook: Despite uncertainties surrounding future AI spending, Broadcom's growth potential and market position make it a solid long-term investment choice, with investors advised to monitor shifts in AI expenditure to adjust their strategies accordingly.
See More
US Stocks Surge as Oil Prices Plunge Over 10%
- Oil Price Plunge Fuels Market Surge: US stocks rallied sharply with the S&P 500 up 1.15%, the Dow Jones up 1.38%, and the Nasdaq 100 up 1.22%, as President Trump postponed strikes on Iranian energy infrastructure, alleviating geopolitical tensions and boosting investor sentiment.
- Bond Yields Decline: The 10-year Treasury yield fell from an 8-month high of 4.44% to 4.33%, providing support for equities as concerns over inflation pressures eased, which could influence future monetary policy decisions by the Federal Reserve.
- Mixed International Market Reactions: While US markets surged, European markets showed mixed results, with the Eurozone consumer confidence index dropping to a nearly 2.5-year low of -16.3, indicating economic uncertainty that may affect future investment strategies.
- Strong Performance from Tech Stocks: The so-called
See More
Broadcom Reports 106% Revenue Growth in AI Segment
- AI Revenue Surge: Broadcom's AI revenue reached $8.4 billion in Q1 2026, reflecting a remarkable 106% year-over-year growth, which underscores its robust momentum in the AI hardware sector and solidifies its market position.
- Overall Financial Performance: The company reported total revenue of $19.31 billion for the quarter, a 29% increase year-over-year, with diluted earnings per share (EPS) at $1.50, up 32% from Q1 2024, indicating a strong overall financial health.
- Significant Customer Orders: Broadcom's partnership with Anthropic has deepened, with the latter placing an additional $11 billion order for TPUs after a previous $10 billion order, aiming to add 1 million TPU chips by 2026, which will further drive Broadcom's revenue growth.
- Strategic Partnerships: Beyond designing TPUs for Google, Broadcom collaborates with companies like OpenAI, highlighting its critical role in the AI hardware landscape and reinforcing its status as an
See More
Broadcom's Partnership with Google on TPU Shows Huge Potential
- AI Revenue Surge: Broadcom's AI revenue more than doubled in Q1 2026, reaching $8.4 billion, reflecting a robust growth trajectory in the AI hardware sector that solidifies its market position.
- Total Revenue Growth: The company's total revenue for the quarter was $19.31 billion, a 29% increase from Q1 2025, indicating strong performance across multiple business segments and boosting investor confidence in its future prospects.
- Strong Profitability: Broadcom reported diluted earnings per share (EPS) of $1.50, up 32% year-over-year, with a net profit margin of 36.57%, showcasing its excellence in cost control and profitability enhancement.
- Strategic Partnerships: The collaboration with Google on TPU and significant orders from Anthropic worth $10 billion and $11 billion highlight Broadcom's critical role in AI chip design, with potential for further market share expansion in the future.
See More
Tower Semiconductor's Tech Breakthrough Boosts Stock Price
- Technological Breakthrough: Tower Semiconductor and partner Coherent have unveiled a new technology that utilizes fiber-optic signals to achieve data transmission speeds of 420 gigabits per second between processors in data centers, marking a significant advancement for AI data center performance.
- Positive Market Reaction: Following the announcement, Tower Semiconductor's stock rose by 4.39%, peaking at an 11% increase early in the day, indicating investor optimism regarding the commercialization prospects of this new technology and reflecting market confidence in its growth potential.
- Enhanced Competitive Position: If successfully commercialized, Tower Semiconductor will join a select group of companies, including Broadcom and Lumentum, capable of supplying high-speed networking solutions for the AI data center industry, thereby strengthening its position in this rapidly evolving market.
- Cautious Investor Outlook: Despite the recent stock surge, with a 480% increase since last April and a 56% rise this month, investors should carefully assess the situation, as today's performance may indicate a peak, suggesting a wait for a healthier dip before investing.
See More
ASML Stock Rises on AI Demand Outlook
- Stock Surge: ASML's stock jumped 5.1% to $1364.12 by 11:40 a.m. ET on Monday, reflecting market optimism about the artificial intelligence sector, even though analyst Stacy Rasgon did not mention ASML directly.
- Positive Industry Outlook: Bernstein analyst highlights that despite a sell-off in AI stocks this year, demand for AI remains strong, with projections for Broadcom and Nvidia's 2025 profits potentially reaching $20 and $12 per share, respectively, indicating a bullish trend for the semiconductor sector.
- Supply Chain Impact: As profits soar for Broadcom and Nvidia, third-party contractors like TSMC will have more capital to invest in ASML's machines, thereby driving ASML's sales growth further up the supply chain.
- Earnings Expectations: Although ASML's price-to-earnings ratio stands at 46.5, suggesting it is not cheap, analysts anticipate a 19% annual earnings growth over the next five years, and if AI chip demand continues, ASML's stock could rise rapidly, presenting a buying opportunity for investors.
See More
