Can the Rally in Amazon’s Stock Continue with New Powerful AI Chip?
Artificial intelligence is everywhere, and so are the companies driving this tech revolution. Among them, Nvidia (NASDAQ: NVDA) stands tall, powering AI models like ChatGPT and Llama with its cutting-edge GPUs (graphics processing units). But could another player steal some of the spotlight? Let’s chat about it.
Nvidia’s AI Leadership
Nvidia is the name most investors associate with AI chips, and for good reason. The company’s GPUs are crucial for training AI models, helping it maintain a massive lead over competitors. In its third fiscal quarter of 2025, Nvidia’s data center revenue hit a jaw-dropping $30.8 billion—a 112% year-over-year surge. To put that into perspective, AMD only brought in $3.5 billion from its data center segment in the same period.
But here’s the kicker: some investors are starting to notice a slight cooldown in Nvidia’s revenue growth. Last quarter, Nvidia reported a 94% year-over-year revenue increase, down from the stunning 122% growth it posted the quarter before. And while the market predicts a still-impressive 70% growth this quarter, Nvidia’s premium valuation has some folks exploring other opportunities.
The Rising Contender: Broadcom
Enter Broadcom (NASDAQ: AVGO). Known for its expertise in custom AI chips—specifically application-specific integrated circuits (ASICs)—Broadcom is being touted as the next big thing in AI chip technology. Unlike GPUs, ASICs are designed for specific tasks, offering cost efficiency and lower power consumption, making them a hot commodity in the AI world.
Broadcom holds an impressive 55%-60% share of the ASIC market. And demand for these chips is expected to grow at an annual rate of 32% through the decade, according to market research firm Lucitel. That’s not all: analysts at JPMorgan project a staggering $150 billion revenue opportunity for Broadcom in the custom AI chip market.
Why Dec. 12 Matters
So why is Broadcom the stock to watch this week? The company is set to release its fiscal 2024 fourth-quarter results on Thursday. If recent trends are any indication, this could be the catalyst that sends its stock soaring. Broadcom has already delivered impressive returns this year, and its growing dominance in the ASIC space could propel it even higher.
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