With its outstanding performance in the field of artificial intelligence, Broadcom's market value has exceeded the trillion-dollar mark, becoming a giant in the field of AI chips. Its CEO Chen Fuyang is confident in the continued development of the AI investment boom and predicts that the boom will continue until the end of the 2020s. Broadcom's strong performance growth and cooperation with technology giants indicate its important position in the AI hardware market and lay a solid foundation for its future development. This article will deeply explore Broadcom’s strategic layout, development status and future prospects in the field of AI.
Broadcom has successfully entered the trillion-dollar market capitalization club with its strong performance in the artificial intelligence market. Company CEO Chen Fuyang looks to the future and predicts that the AI investment boom will continue until the end of the 2020s. He revealed that Broadcom’s customers plan to build large-scale computing clusters equipped with millions of AI chips in the next three years, which will drive rapid market growth.
In its earnings call on December 12, Broadcom showed impressive performance. In fiscal 2024, the company's AI-related revenue increased by 220% year-on-year to US$12.2 billion. This growth was mainly driven by strong demand for its AI XPU and Ethernet product portfolios.
Chen Fuyang revealed that Broadcom is cooperating with three major customers to develop AI chips and plans to deploy a network cluster of 1 million chips by 2027. He predicts that the total market size of XPU and AI network components will reach US$60-90 billion by 2027. Although Broadcom has not officially announced its customer list, analysts pointed out that its main partners include Google, Meta and ByteDance.
In the field of AI hardware, Broadcom continues to expand its influence through cooperation with technology giants such as OpenAI and Apple. Broadcom has become a key partner for AI hardware solutions as companies look for alternatives to Nvidia. Among them, Apple is cooperating with Broadcom to develop the first AI server processor "Baltra", which is expected to be mass-produced in 2026; OpenAI is also cooperating with Broadcom to develop an AI inference processor, which is also planned to be put into production in 2026.
Looking ahead, Wall Street is optimistic about Broadcom's prospects. Goldman Sachs raised Broadcom's 12-month price target to $240 from $190. Morgan Stanley predicts that capital expenditures by Amazon, Google, Meta and Microsoft will reach approximately US$300 billion in 2024, which may further increase by 2026, with most of the investment going to fixed assets such as data centers.
Chen Fuyang expressed optimism about the growth of Broadcom's AI business at the latest financial report meeting, especially emphasizing the need for customized AI accelerators. This series of developments marks that the AI chip market is entering a new stage of development, and Broadcom is expected to play a more important role in this round of technological innovation.
All in all, Broadcom occupies a leading position in the field of AI chips with its strong technical strength and strategic cooperation. It has huge future development potential and deserves continued attention. Its success in the field of AI has also provided valuable experience and reference for other companies.