Shares in Broadcom (AVGO) slipped over 3% today despite launching a new Nvidia (NVDA) rivaling AI network chip.
Elevate Your Investing Strategy:
- Take advantage of TipRanks Premium at 50% off! Unlock powerful investing tools, advanced data, and expert analyst insights to help you invest with confidence.
AI Breakthrough
The chip, impressively dubbed the Thor Ultra, enables computing infrastructure operators to deploy more chips than they could previously. Networking chips help data center operators move information around inside a facility.
It is the industry’s first 800G AI Ethernet network interface card designed for large-scale artificial intelligence data centers with over 100,000 XPUs. XPUs are specialized, high-performance processing units, such as AI accelerators.
Thor Ultra supports data speeds of 800 gigabits per second, allowing operators to build and run the large models used to power AI apps such as ChatGPT.
“Thor Ultra is a breakthrough in AI networking,” said Ram Velaga, senior vice president and general manager of Broadcom’s Core Switching Group.”By introducing the first 800G NIC (network interface card) with full UEC feature compliance and Advanced RDMA (remote direct memory access) capabilities, we deliver the performance, scalability, and openness required for tomorrow’s scale-out AI clusters — without the lock-in and with true interoperability.”
NVDA Challenge
Like the Norse God of Thunder, Thor Ultra will battle Nvidia’s networking interface chips.
That will be a double hammer blow for Nvidia given the deal announced on Monday between Broadcom and ChatGPT maker OpenAI to roll out 10 gigawatts worth of custom chips beginning in the second half of 2026.
AI represents a big opportunity for Broadcom. Chief executive Hock Tan said late last year the market the company is going after for its various AI chips is in the range of $60 billion to $90 billion in 2027, divided between its networking chips and the data center processors it helps Alphabet’s (GOOGL) Google and OpenAI make.
As can be seen above, Broadcom is making steady progress in terms of semiconductor revenue, as well as other areas such as infrastructure software.
Is AVGO a Good Stock to Buy Now?
On TipRanks, AVGO has a Strong Buy consensus based on 27 Buy and 2 Hold ratings. Its highest price target is $460. AVGO stock’s consensus price target is $389.48, implying a 12.82% upside.
