Anushka Mukherji
4 min read
In This Article:
Chip giant Broadcom (AVGO) doesn’t always make the front page when the artificial intelligence (AI) conversation kicks off. Instead, companies like Nvidia (NVDA) tend to dominate the headlines. But Broadcom has quietly and steadily become a key player behind the curtain. As AI reshapes everything from cloud infrastructure to autonomous vehicles, Broadcom’s influence is proving to be anything but background noise.
Now sitting comfortably in the trillion-dollar club, Broadcom’s strength lies in its highly specialized application-specific integrated circuits (ASICs), which power the custom AI chips used by tech leaders like Alphabet (GOOGL) and Meta (META). These ASICs form the backbone of modern data centers, enabling the intense computational workloads required for cutting-edge AI models.
In fact, Broadcom has recently stepped into the spotlight. This time, it's thanks to a bold new Street-high price target of $400 from HSBC, signaling strong conviction in the company’s long-term growth. Could Broadcom actually hit that mark before year-end?
Based in Palo Alto, California, Broadcom spans semiconductors, enterprise software, and cybersecurity, offering a broad portfolio that supports critical technology infrastructure. Its solutions are found across cloud platforms, data centers, wireless networks, and connected devices, playing a behind-the-scenes role in keeping digital systems up and running.
With a market capitalization hovering around $1.2 trillion, Broadcom has shown impressive strength in 2025, managing to outperform despite broader market choppiness. While the S&P 500 Index ($SPX) has gained a modest 3.5% year-to-date (YTD), AVGO stock has surged with a 14% YTD climb.
The real momentum, however, has come in recent months. Shares have surged 40% over the past three months alone, fueled by rising demand for AI infrastructure and investor optimism. Looking over the past year, Broadcom’s 67% return dwarfs the S&P 500’s 11% gain, highlighting just how sharply the chip giant has broken away from the pack.
In its fiscal 2025 second-quarter earnings report released on June 5, Broadcom delivered a standout performance. The firm posted revenue of $15 billion, narrowly beating estimates of $14.95 billion and marking a strong 20% year-over-year (YOY) increase. The growth was fueled by soaring demand for AI semiconductors, while contributions from VMware added an extra boost to the top line, reinforcing Broadcom’s expanding footprint across both hardware and software.
