Broadcom stock rides AI wave ahead of earnings report

2025-06-04 nvidia

New York, Wednesday, 4 June 2025.
Broadcom’s stock is surging, mirroring NVIDIA’s success. It jumped over 30% in one month. Investors anticipate Broadcom’s fiscal results. Options pricing suggests a potential 6.5% stock swing post-earnings. This could push shares to a record high of $273, or down to $240. Analysts are optimistic, thirteen of fourteen give a ‘buy’ rating. Still, they project limited gains. NVIDIA’s AI success heavily influences Broadcom’s positive market sentiment. Broadcom’s AI semiconductor and infrastructure software are key strengths.

Analyst perspectives on broadcom’s ai prospects

Analysts predict Broadcom will outperform expectations, driven by its AI business [6]. Christopher Danely, a Citi analyst, reaffirmed a ‘buy’ rating on Broadcom, raising the price target to $276 [7]. Danely estimates AI could contribute about 30% of Broadcom’s revenue this year [6][7]. Cantor Fitzgerald analysts also foresee an ‘exceeded expectations’ report, emphasizing the demand for customized silicon chips and the ramp-up of Google’s next-gen TPUs [6]. Melius Research analysts consider Broadcom a must-own AI stock, citing its leadership in the fabless chip sector [6].

Broadcom’s tomahawk 6 chip

Broadcom recently unveiled its Tomahawk 6 data center switch chip [7]. This chip boasts an Ethernet switching capacity of 102.4 terabits per second [7]. It is designed for data centers operating AI processor clusters [7]. The Tomahawk 6 utilizes a 3nm process from TSMC, an upgrade from the 5nm process used in the Tomahawk 5 [7]. This advancement doubles bandwidth, reduces power consumption, and enhances reliability [7]. The chip’s open standards aim to counter NVIDIA’s proprietary technologies [7].

Market reaction and competitive landscape

The announcement of the Tomahawk 6 boosted Broadcom’s stock [7]. The stock rose nearly 3.3%, pushing the company’s market capitalization close to $1.2 trillion [7]. While NVIDIA dominates the AI chip market with GPUs, Broadcom and Marvell Technology focus on customized silicon solutions [6]. Jay Goldberg, an analyst at Seaport Research Partners, noted that Marvell’s recent growth surpassed NVIDIA’s, signaling positive trends for Broadcom [6]. Broadcom’s ability to offer high-performance, cost-effective AI chips gives it a unique position [6].

JPMorgan’s outlook and market indicators

JPMorgan analysts highlight Broadcom’s upcoming earnings and U.S. jobs data as key factors supporting the stock market [4][5]. They maintain a short-term positive outlook on U.S. stocks, but acknowledge concerns about escalating trade war rhetoric [4][5]. They suggest that if Broadcom’s earnings meet expectations and non-farm employment remains above 100,000, the market could continue its upward trend [4][5]. A non-farm employment number between 75,000 and 80,000 would be a ‘yellow warning signal,’ and below 50,000 a ‘red warning signal’ [4][5].

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