Thursday after releasing forecast showing up to $90 billion in annual sales from custom artificial intelligence chips by fiscal 2027, Broadcom (AVGO, Financial) reached a $1 trillion market valuation. The chipmaker achieved the major feat with an almost 20% spike in shares in reaction to the announcement taking YTD gains to a whopping 95%.
Though the company's most recent quarterly performance exceeded analysts' forecasts, investor interest was drawn to forward-looking artificial intelligence hardware. During an earnings call, Broadcom's CEO Hock Tan
emphasized the enormous total addressable market for custom artificial intelligence accelerators, approximating it to be between $60 billion and $90 billion in three years.
Analysts on Wall Street reflected the same hopeful view. Reiterating a "buy," Jefferies analyst Blayne Curtis boosted Broadcom's price target to $225 from $205. Curtis observed increasing faith in the implementation of xPU clusters with an eye toward artificial intelligence, as Broadcom has long expected.
Broadcom’s announcement had a domino effect throughout the semiconductor industry with shares of Marvell Technology (MRVL, Financial), Arm Holdings (ARM, Financial), and Micron Technology (MU, Financial) all ticking higher. As we look ahead, the growing involvement of Broadcom in this ecosystem has helped the company to become a leader in the next
wave of artificial intelligence hardware innovation.
