Broadcom Inc. (NASDAQ:AVGO) has joined the elite trillion-dollar companies club, following a significant increase in artificial intelligence revenue to upwards of $60-90 billion by 2027. The stock has surged over 30% in the past month as investors take notice of its substantial growth. In contrast, AI revenue grew from $3 billion to $12 billion in just one year.
Analysts at Bank of America hail Broadcom a prime AI opportunity, citing its stable core business and growing interest from major tech giants like Meta Platforms, Amazon, Microsoft, and Alibaba. However, some analysts, such as Charles Schwab’s Alex Coffey, believe that most are missing the mark, pointing to Broadcom’s consistent performance over time.
The company’s recent fiscal fourth-quarter results demonstrate a significant shift towards high-growth potential. Revenue increased 51% year-over-year to $14.05 billion and full-year revenue grew 44% to $51 billion. This marks a transition from a value investment to a hyper-growth play with substantial upside potential.
Broadcom’s stable core business in chip sales remains a key driver of growth, while the company is increasingly diversifying its revenue base beyond hardware sales. Its VMware acquisition has strengthened its prospects on the software side of the business, with successful integration yielding $21.5 billion in software revenue, accounting for 44% of total revenue in 2024.
Source: https://finance.yahoo.com/news/broadcom-avgo-biggest-winner-nvidia-151500366.html