The meta platform and Google shared fantastic news for Broadcom investors.
NVIDIA is far from the only show in the city for these huge AI spenters.
Big Tech plans to spend large -scale spending in 2025. Four of the world’s largest technology companies are aiming for CAPEX (Compex) this year, and most expenditures will be done to build artificial intelligence and refresh (AI).
nvidia (NASDAQ: NVDA) It will be a big winner in all that spending. In fact, all large companies have repeated the importance of relationships with major designers of the Graphics Processing Units (GPU). But the opinion of management Meta platform And Google Parent alphabet We suggested a bright future to other chip producers.
Broadcom (AVGO -1.17%)) Since 2025, BIG Tech’s expenditure can be a big winner. The words of Meta and Google’s words and Broadcom investors are as follows.
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Rising
Broadcom creates a variety of semiconductors. It plays an essential role in relation to the AI data center. Chips for network switches, data to move quickly and efficiently between servers. In fact, Broadcom’s chip checks that the chip of NVIDIA is working as effective as possible in the data center of Meta and Google.
But Broadcom also creates another chip that Meta and Google distribute to the data center. This technology is behind META’s custom AI chip, MTIA (Meta Training and on -OND ONFERENCE Accelerator).
Meanwhile, Google has been developing TPU (Tensor Processing Unit) in cooperation with Broadcom since 2015. Meta and Google talked about the custom chips during the four -quarter import call.
During the call of META, Susan LI Chief Financial Officer told the analysts: “In 2024, we began to affect the workload of advertising and organic content on the ranking and recommendation of MTIA. I look forward to the adoption of MTIA for these use cases for 2025. “
In the long run, META sees chip more and more AI data centers of NVIDIA and General GPUs. “I hope to expand MTIA next year to support some of the core AI training workloads and to support some of the cases of Genai use over time.”
Sundar Pichai, CEO of the alphabet, in the fourth quarter, “We saw the powerful absorption of Trillium, the 6th generation TPU.” The company launched the latest TPU to the general public in December, and the developer provided less than three weeks of use before the end of the quarter. Therefore, this opinion suggests that 2025 can be a great year of the TPU.
Custom AI accelerator chips are more efficient than regular target GPUs for multiple types of AI workloads. As a large technology expands the data center, absorbing small efficiency can have a big impact on the conclusion. As a result, as the CAPEX budget increases, it is becoming more and more important to expand the use of custom chips and to control the technology stack completely.
Broadcom expects more powerful results in the long run
Alphabet and Meta are not the only companies that partner with Broadcom to build custom AI accelerators. Tiktok parent company bytedance is one of the largest customers. And during the fourth quarter, Broadcom Management announced that two new customers have built their own next -generation chips. Many people believe so apologize And Openai.
Apple is especially a fan of the chip of Broadcom. Last year, we trained the Apple Intelligence system using Google’s previous generation TPU. Apple’s efforts to control AI training and development more can quickly change this into one of Broadcom’s largest customers.
The company expects the customized AI accelerator market to grow from $ 60 billion to $ 9 billion within three years. Last year, Broadcom accounted for about 70%of the Custom AI Accelerator and posted sales of about $ 12 billion.
For reference, the total sales for various operations in 2024 is only $ 51.6 billion, so the growth of the AI chip can doubles the profit by maintaining the market share.
But even if there is a bright future, the evaluation is still important. Broadcom’s stock trades 37 times futures from this article. And Chipmaker is ready to see a very powerful income for the next few years, but paying a premium for stocks is difficult to justify.
If the stock price has fallen to nearly 30 times in 2025, it will be worth the purchase, considering that analysts expect an increase of more than 30% this year. Adopting Broadcom’s custom chips is much more powerful than expected because META and Google are trying to expand their use in data centers.
Broadcom is certainly a company and stock that keeps watching investors interested in the future of AI. But now it’s too expensive to recommend purchases.
Randi Zuckerberg, a member of the exhibition hall, a spokesman for Facebook and a sister of the Meta platform, is a member of the board of directors of MOTLEY FOOL. Suzanne Frey, an executive of Alphabet, is a member of the board of directors of Motley Fool. ADAM Levy has a position on the alphabet and meta platform. MOTLEY FOOL is recommended and recommended in alphabets, meta platforms and NVIDIA. MOTLEY FOOL recommends Broadcom. The MOTLEY FOOL has a public policy.
