Broadcom targets $12B AI chip revenue by 2024 amid hyperscaler surge

Broadcom has revised its fiscal 2024 AI semiconductor revenue outlook from $7.5 billion to $12 billion, driven by anticipated increased spending from large Tier-1 hyperscalers. This information was shared by Broadcom President Dr. Charlie Kawwas during the Communacopia & Technology Conference 2024. Analysts, including Goldman Sachs' Toshiya Hari, have reiterated a Buy rating on Broadcom, projecting a price target of $190 per share. Dr. Kawwas emphasized the company's commitment to building a sustainable franchise through technological leadership. He highlighted the efficiency of Broadcom's central engineering team, which has significantly reduced the development cycle for custom accelerators from approximately three years to under one year. This advancement positions Broadcom favorably against merchant solutions like GPUs, particularly for hyperscalers managing internal workloads. The presentation also noted that Ethernet is expected to remain the preferred AI networking protocol due to its open-source nature and power efficiency. Dr. Kawwas introduced Broadcom's 2nd-generation Co-Packaged Optics (CPO) product, which is set for volume production by 2025 or 2026. This innovative solution is designed to replace multiple high-power transceivers, showcasing Broadcom's focus on energy-efficient technologies. Currently, Broadcom is in the proof of concept stage with three hyperscale customers, with plans for initial deployment in the first half of 2025. Analysts project Broadcom's fiscal 2024 revenue to reach $51.8 billion, with an adjusted EPS of $3.88, reflecting the company's strong position in the AI semiconductor market.