Posted 2/12/2024, 3:47:00 PM
Broadcom Poised to Become Major AI Chip Rival to Nvidia with Fast Revenue Growth and Lower Valuation
- Nvidia stock has surged over 200% in the past year due to rising demand for AI chips. However, the stock trades at a steep 38x sales.
- Broadcom trades at just 14.6x sales and could become the 2nd largest AI chip supplier this year with $8B-$9B in revenue.
- Broadcom has a 35% share of the high-end custom AI chip market and big customers like Google, Microsoft, and Meta.
- Broadcom's AI revenue grew 16% last quarter to $1.5B, suggesting 33-50% growth this year.
- If Broadcom hits expected $50B revenue this year and maintains valuation, its market cap could rise 25%.