Broadcom (AVGO) Strengthens Position in AI Compute and Infrastructure Ecosystem

Broadcom Inc. (NASDAQ:AVGO) is among Goldman Sachs’ top semiconductor stock picks. On January 26, JPMorgan’s analysts released their monthly list of top technology stock picks, highlighting opportunities across growth, income, and value strategies, with semiconductors and infrastructure software among the focus areas. Broadcom Inc. (NASDAQ:AVGO) was featured for its diverse portfolio spanning wireless, broadband, networking, and storage, while Wells Fargo upgraded the stock to Overweight and the company issued $4.5 billion in senior notes.

On January 20, Goldman Sachs reiterated its preference for Broadcom Inc. (NASDAQ:AVGO) as one of the leading companies in the compute ecosystem alongside Nvidia. The bank said this decision is based on the view that Broadcom is positioned to benefit from ongoing capital spending tied to artificial intelligence infrastructure and from networking technology trends valued in AI compute.

In its research, Goldman constructed an inference cost curve to compare AI compute solutions from various chipmakers and how their relative costs evolve. The bank said it created the curve to help address investor questions about competition between traditional GPU-based solutions and custom ASIC designs. And its analysis found that Google and Broadcom’s tensor processing unit (TPU) implementations are narrowing the cost gap with Nvidia’s GPU solutions when judged by compute cost efficiency.

The bank also noted that the latest TPU version, TPU v7, reduced inference cost per token by about 70% compared with the prior TPU v6. And this change placed TPU v7 on par or slightly better than Nvidia’s GB200 NVL72 in absolute cost terms.

Goldman’s report also compared Broadcom/Google TPU performance with other competitors. The results were that Amazon’s Trainium and AMD’s accelerators showed only around 30% cost reductions. As such, the bank concluded that these alternatives are further behind in terms of cost efficiency.

Broadcom Inc. (NASDAQ:AVGO) is a semiconductor company. It designs, develops, and supplies chips for networking, broadband, wireless, and storage applications, primarily through its custom ASICs, networking processors, and wireless connectivity solutions. Its main products are semiconductors that power data centers, smartphones, and enterprise infrastructure, supporting artificial intelligence workloads and next-generation connectivity.

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Disclosure: None. This article is originally published at Insider Monkey.