There is a 'Nvidia Moment' for Broadcom as Its Stock Continues to Rise

Broadcom Inc.'s stock is set to extend its remarkable rally following Friday’s historic gains, with one analyst likening the company’s trajectory to an "Nvidia moment."

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On Monday morning, shares of Broadcom rose by an additional 4.2% after Friday’s 24.4% surge, which marked the largest single-day percentage gain in the company's history. That dramatic rally added $206 billion to Broadcom’s market capitalization, ranking as the sixth-largest one-day market cap increase for any U.S. company, according to Dow Jones Market Data.

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Before Friday’s surge, Broadcom was already a heavyweight in the semiconductor sector with a market valuation of approximately $800 billion. Now, the company has firmly entered the $1 trillion club, and its rapid ascent is drawing parallels to Nvidia Corp.’s meteoric rise as a dominant player in the artificial intelligence (AI) semiconductor space.

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A Turning Point for Broadcom

Stacy Rasgon, an analyst from Bernstein, described Broadcom’s current position as its own “Nvidia moment.” He pointed to the company’s strong growth story in AI, including the anticipation of a significant ramp-up in new AI products by the second half of 2025 and a promising long-term outlook for the market.

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Broadcom has projected a $60 billion to $90 billion serviceable addressable market (SAM) for AI by its fiscal 2027, based on current hyperscale customer deployments. This estimate could grow even larger if more companies currently in discussions with Broadcom decide to adopt its solutions, according to management’s comments.

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Rasgon named Broadcom his top semiconductor stock pick, emphasizing the company’s multiple growth drivers. He acknowledged that Broadcom, like others in the semiconductor industry, faces challenges in its core business areas outside of AI. However, he sees signs of improvement, especially as Broadcom benefits from easier year-over-year comparisons heading into 2025.

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Beyond its AI ambitions, Broadcom has been excelling in its integration of VMware, a software company it acquired in 2023. Rasgon noted that VMware’s performance is exceeding expectations in several areas, bolstering Broadcom’s broader business portfolio.

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Despite challenges in its non-AI core businesses, Broadcom’s success with VMware and its rapidly growing AI opportunities are reshaping its growth narrative. Rasgon highlighted the potential for Broadcom to capture a significant share of the AI hardware and software markets in the coming years, especially as hyperscale customers ramp up their spending.

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AI Opportunities Resemble Nvidia’s Path

Broadcom’s AI story is drawing comparisons to Nvidia, which has seen extraordinary success as a leader in AI chip manufacturing. Nvidia’s dominance in AI-enabled GPUs and its ability to capitalize on hyperscale data center demand have propelled it to become a trillion-dollar company. Broadcom is now seen as following a similar path, with significant upside potential in the AI space as companies increasingly invest in advanced computing solutions.

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Rasgon remains optimistic about Nvidia as well, emphasizing that it’s a must-have stock for investors looking to benefit from the explosive growth in AI. “2025 seems likely to be an exceedingly good year,” he noted, referencing the substantial spending and purchase intentions of Nvidia’s customers. Concerns about 2026, he said, appear to be limited to investors rather than the companies driving demand for AI solutions.

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Long-Term Outlook for Broadcom

Broadcom’s strong position in AI, coupled with its success in integrating VMware, suggests that the company is well-positioned for sustained growth. Although its non-AI core business faces ongoing challenges, improvements in these segments and the massive growth potential in AI give Broadcom a compelling narrative for investors.

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As Broadcom continues to expand its footprint in AI, its market opportunity looks increasingly robust, with management’s projections for a sizable SAM by 2027 further reinforcing its long-term potential. The company’s ability to deliver on these projections and capitalize on the growing AI trend will be key to sustaining its momentum and justifying its $1 trillion valuation.

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Broadcom’s recent surge has captured Wall Street’s attention, with analysts like Rasgon viewing it as a leader in the AI semiconductor space. While the stock has experienced significant gains in recent days, its long-term potential continues to excite investors, particularly as hyperscale customers ramp up their spending on AI infrastructure.

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In conclusion, Broadcom’s record-setting rally and AI-driven growth story have positioned it as a standout in the semiconductor sector. With parallels to Nvidia’s rise and a promising outlook for 2025 and beyond, Broadcom appears poised to solidify its place among the most influential players in the AI revolution.

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