Bernstein Says AI Competition Fears Around Broadcom (AVGO) Are Overblown

Broadcom Inc. (NASDAQ:AVGO) is one of the AI Stocks Investors Are Watching Closely. On January 9, Bernstein SocGen Group analyst Stacy Rasgon reiterated an Outperform rating on the stock with a $475.00 price target. Firm analysts have dismissed competitive threat concerns for Broadcom, citing leadership in the AI ASIC space with unmatched innovation and execution.

Bernstein held a meeting with company leadership and noted how concerns about rising AI competition are overblown. Investors have been particularly concerned about rising competition and customer-owned tooling (COT)’s impact on Broadcom’s AI-dominant position.

“But we spent almost an hour with Charlie yesterday (in a session that was as much teach-in as anything else) as he walked us (in sharp detail) through Broadcom’s technological, scale, and supply chain advantages around their XPU roadmaps and business. We came away with more conviction than ever that these worries are hugely overblown, and that the company is unlikely to be dethroned in the AI ASIC space anytime soon.”

The firm noted how Broadcom acknowledges Nvidia’s pace of innovation in the AI space, which actually benefits the company since they are the only company that can enable XPU customers to keep up with NVIDIA’s roadmap trajectory.

Highlighting its numerous technical innovations, Broadcom’s innovation appears matchless amid competitors and customers.

“With technical innovations around 3D chip stacking and 400G serdes, to supply chain scale, to investment in their own substrate manufacturing, to new techniques that might even allow interposer-less manufacturing, the company continues to innovate across dimensions that no competitors or customers can match.”

Broadcom is a technology company uniquely positioned in the AI revolution owing to its custom chip offerings and networking assets.

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