TLDR
- Broadcom launched three new Wi-Fi 8 chips targeting residential broadband gateways, its fourth wave of Wi-Fi 8 releases
- AVGO briefly crossed a $2 trillion market cap on April 22, rallying 32% in the past month and 16% year-to-date
- Q1 AI semiconductor revenue jumped 106% year-over-year to $8.4 billion; Q2 AI chip revenue is projected at $10.7 billion
- Broadcom is working with six major AI customers including Google, Meta, and OpenAI, with a Google deal locked in through 2031
- Meta raised its annual capex forecast by $10 billion to $125–$145 billion, benefiting chip suppliers including Broadcom
Broadcom had a busy week. Between a fresh chip launch, a $2 trillion market cap crossing, and Big Tech pouring more money into AI infrastructure, there was a lot moving around AVGO.
On April 30, Broadcom announced three new chips for residential broadband gateways: the BCM68565 gateway system-on-chip and two dual-band Wi-Fi 8 radio chips, the BCM67142 and BCM67192. The chips combine 10G PON fiber connectivity with Wi-Fi 8 technology.
The BCM68565 supports XGSPON, GPON, and Active Ethernet fiber modes. It includes a CPU complex with open source middleware support, a dedicated network processing engine, and compatibility with DDR4, DDR5, LPDDR4, and LPDDR5 memory.
The two radio chips integrate 2.4-GHz and 5-GHz bands into single chips. Broadcom says the third-generation digital pre-distortion on these chips cuts peak power by 25%. The integrated design is aimed at reducing component costs and simplifying board layouts.
This marks Broadcom’s fourth wave of Wi-Fi 8 releases. The chips are currently sampling with early access customers. No pricing or commercial availability dates were given.
AVGO Crosses $2 Trillion
On April 22, AVGO briefly touched a $2 trillion market cap, with the stock rallying to near $422. The move was driven by deepening AI partnerships, including a deal with Google that runs through 2031 and a collaboration with Anthropic expected to unlock around 3.5 gigawatts of compute capacity from 2027.
Broadcom’s Q1 results gave investors plenty to work with. Revenue rose 29% year-over-year to $19.31 billion. Semiconductor revenue hit $12.5 billion, up 52%, with AI semiconductor revenue surging 106% to $8.4 billion.
For Q2, Broadcom is guiding semiconductor revenue of $14.8 billion, up 76% year-over-year. AI chip revenue is projected at $10.7 billion, which would represent 140% growth.
The company is now working with six major AI customers on multi-year, multi-gigawatt deployment plans. Broadcom has set a target of generating more than $100 billion in AI chip revenue by 2027.
Free cash flow came in at $8 billion in Q1, equal to 41% of revenue. The company returned $10.9 billion to stockholders in the quarter through dividends and buybacks.
Big Tech Capex Adds Tailwind
Broadcom got another boost from Big Tech earnings. Meta raised its 2025 capital expenditure forecast by $10 billion to a range of $125 billion to $145 billion. Microsoft and Alphabet also raised their capex outlooks.
Meta has chip supply agreements with Broadcom, Nvidia, and AMD. The higher spend forecasts from these hyperscalers helped ease concerns sparked earlier in the week by reports that OpenAI had missed internal revenue targets.
In premarket trading on April 30, AVGO was up 1.4%.
Mizuho has an Outperform rating on AVGO with a $480 price target. Of 42 analysts covering the stock, 35 rate it a Strong Buy. The average price target sits at $469.94, with a high target of $630.
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