Broadcom disrupts tech industry with bold AI computing platform launch
- Broadcom is projected to exceed consensus revenue estimates in the fourth fiscal quarter of 2024.
- The company estimates a substantial increase in AI revenues, anticipating between $17 billion and $18 billion for fiscal 2025.
- These projections emphasize Broadcom's strong market position and expected growth in the AI sector.
In the fiscal fourth quarter of 2024, Broadcom Inc is projected to report revenues between $14.2 billion and $14.3 billion, which exceeds consensus estimates of $14.1 billion. JP Morgan analyst Harlan Sur has maintained an Overweight rating on Broadcom with a price target of $210 based on strong demand for AI products and an anticipated recovery in diversified semiconductor markets. For fiscal 2025, he expects a sequential growth in revenue and earnings, attributing some challenges to seasonal trends and product transitions at large AI customers. Broadcom forecasts a major uptick in AI revenues with expectations of reaching between $17 billion and $18 billion in fiscal 2025, which marks a 40%+ growth compared to the previous year. The anticipated increase is driven by the successful ramp of Google’s TPU AI processor and the planned production of Meta Platform’s MTIA AI 3nm processor. Sur noted that the company is also expanding its AI customer engagement pipeline significantly, increasing from five to six key customers. Moreover, the broader semiconductor market is expected to recover alongside continued strong demand for AI products. Sur projects Broadcom will achieve approximately $12 billion to $12.5 billion in AI revenues for fiscal 2024, tripling its performance from the prior year. As part of its strategy, Broadcom has been working to streamline its AI and software solutions through various collaborations that are aimed at unlocking further growth opportunities. Furthermore, Sur highlighted the potential of a $30 billion pipeline of AI revenue opportunities for each customer over the next four to five years, which collectively could lead to a total of $150 billion in cumulative revenue potential. This consolidated approach underlines Broadcom's position as the second-largest AI semiconductor supplier and emphasizes the company's focus on maintaining a competitive edge in the AI semiconductor space, especially through advancements like its new 3.5D XDSiP platform for efficient AI computing.