ChatGPT has unleashed a festival in the semiconductor segment. We’ve been seeing it all year with an NVIDIA unleashed thanks to its AI chips. It is not the only one, because TSMC has also grown significantly. Curiously, there is a company that without making too much noise has become another of the major players in the market: Broadcom.

When Broadcom tried to buy Qualcomm. A lot has rained since 2018 Broadcom tried to buy Qualcomm. This last rejection the movement. That attempt was also blocked by the Trump administration because it was considered that the company – originally from Singapore, although with legal headquarters in the US – was too close to possible Chinese interests. It didn’t matter that Broadcom didn’t get what it wanted: it has done very well without Qualcomm.

These 10 companies are those that make up the select group of companies with a market capitalization of over one trillion dollars. Source: Companies Market Cap.

Welcome to the trillion dollar club. Last Friday Broadcomm shares rose an incredible 24% on the NASDAQ. It was the best day in their history, and with that rise they managed to become one of the ten companies that today exceed a valuation of one trillion dollars. It is the eighth US company to achieve this: only Saudi Aramco and TSMC enter that group of chosen ones, being companies from other countries.

Acquisitions and diversification. Although Broadcom’s focus has always been semiconductors, the company has been diversifying into the world of software and infrastructure as a service for several years. It has done so thanks to especially notable acquisitions, and some of them especially colossal:

• CA Technologies (July 2018): company that develops cloud solutions and enterprise software. 19,000 million.
• Symantec (August 2019): Security software company. 10.7 billion dollars
• VMware (May 2022): company that develops virtualization software and solutions. 61 billion dollars.

But it’s AI that drives its value. Although that diversification is working, what has really driven Broadcom’s growth in recent months has been, of course, AI. In it fourth fiscal quarter Its revenues in that area grew 150% to $3.7 billion. Part of that revenue is due to its connectivity products, used to interconnect thousands of AI chips in large data centers. Its infrastructure division almost tripled revenue compared to the same period last year.

At Broadcom they do not have a GPU, but rather an XPU. The company develops its own AI chips, which it calls XPU (eXtreme Processing Units). These are accelerators aimed at high performance computing (HPC) and AI. The key to these chips is not just their power or the use of HBM memory: it is their efficiency. According to the manufacturer, its technology 3.5 XDSiP (3.5D) for its XPUs allows a reduction in consumption of up to 10 times when compared to traditional methods. Given the high consumption imposed by AI chips and data centers, having highly efficient solutions is especially important for technology majors, which buy these chips by the thousands.

But NVIDIA is a lot of NVIDIA. Even so, NVIDIA is still far away and its growth has been especially explosive. The graph shows stock market evolution based on 100, which allows showing relative growth and comparative performance. The data clearly shows that Jensen Huang’s company is currently experiencing a very sweet time. Much more than what Broadcom or TSMC have experienced so far. The evolution of Intel, for example, has been almost flat. AMD is not doing particularly well either, and in fact its market capitalization ($205 billion) has fallen 13.5% so far this year. Once again, the blame lies on its still modest role in the field of AI, where its great competitor dominates everything in an imperial way.

Scandal capitalizations. This year NVIDIA’s growth in market capitalization has been 170% and it is already fighting with Microsoft and Apple: all three easily exceed three billion dollars, a figure absolutely unthinkable a few years ago. Even so, Broadcom’s growth in market capitalization in 2023 (97.31% according to CompaniesMarketCap, NVIDIA’s that year was 235.88%) and 2024 (127.75%) is also exceptional, and if these rates continue We are facing one of the protagonists of the technological segment in the short and medium term.

Image | Alpha Photo

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