Fund manager Stephen Yiu of Blue Whale Growth Fund believes Broadcom Inc. (NASDAQ:AVGO) has the potential to surpass AI chip heavyweight Nvidia Corporation (NASDAQ:NVDA) by 2025, driven by the tech giants’ shift towards custom chips.
Yiu’s forecast is based on the fact that companies like Microsoft Corporation (NASDAQ:MSFT), Amazon.com, Inc. (NASDAQ:AMZN), Google LLC (NASDAQ:GOOGL), and Meta Platforms Inc. (NASDAQ:META) are expanding their AI chip supplier base to reduce dependence on Nvidia.
Broadcom has seen significant returns this year, with a 103.42% gain as of Monday pre-market hours, and has partnered with major cloud computing customers such as Meta, Alphabet, and ByteDance to develop custom AI chips. The company’s AI revenue tripled to $12.2 billion in 2024.
Yiu notes that Nvidia’s GPUs are powerful but expensive, making Broadcom a more attractive investment opportunity due to its smaller size. He also points out that Nvidia would need to add significantly more value to reach the same growth rate as Broadcom.
The tech giants’ investments in custom chips support Yiu’s view, with Google, Meta, and ByteDance partnering with Broadcom to develop their AI server chips. This diversification of exposure away from Nvidia could drive Broadcom’s stock price higher.
Source: https://finance.yahoo.com/news/nancy-pelosis-stock-pick-set-113012599.html