Broadcom's New Jericho4 AI Router Might Change the Case for Investing in AVGO

• Earlier this month, Broadcom Inc. began shipping the Jericho4 ethernet fabric router, a platform built to interconnect over one million XPUs across distributed AI data centers, marking a step-change in scalable networking for high-performance computing.
• This development highlights Broadcom’s comprehensive approach to AI infrastructure, leveraging both leading-edge hardware innovation and integration of its broad networking portfolio to serve accelerating demands from AI and hyperscale customers.
• We'll assess how the launch of Jericho4 and AI infrastructure advances could influence Broadcom's growth outlook and investment case.

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Broadcom Investment Narrative Recap

To be comfortable as a Broadcom shareholder, I think you need to believe in the company’s ability to capture a significant share of accelerating AI infrastructure spending while diversifying through software and new customers. While the Jericho4 router launch sets a new benchmark for AI data center networking, the most important near-term catalyst, AI chip demand, remains the key driver, and the biggest risk is the company’s concentrated reliance on a few hyperscale customers; the immediate impact of the Jericho4 news on either is not material.

Among recent announcements, Broadcom’s release of Tomahawk Ultra Ethernet switches for HPC and AI stands out as highly relevant. This product suite complements Jericho4, reinforcing Broadcom’s end-to-end offering for AI infrastructure and potentially strengthening its position with hyperscalers, which directly ties to the catalysts underpinning its short-term growth outlook.

However, if hyperscale customer relationships shift or buying patterns change unexpectedly, investors should be aware that ...

Read the full narrative on Broadcom (it's free!)

Broadcom's outlook anticipates $98.8 billion in revenue and $42.0 billion in earnings by 2028. This trajectory assumes revenue will grow at 20.1% per year and earnings will jump by $28.8 billion from the current $13.2 billion.

Uncover how Broadcom's forecasts yield a $295.79 fair value, a 5% downside to its current price.

Exploring Other Perspectives

Fair value estimates for Broadcom from 35 Simply Wall St Community members span US$179.96 to US$300.38 per share. While many are optimistic about AI technology driving revenue growth, market participants can have sharply differing views, so consider how dependency on major hyperscale clients may affect Broadcom’s future performance as you compare these perspectives.

Explore 35 other fair value estimates on Broadcom - why the stock might be worth as much as $300.38!

Build Your Own Broadcom Narrative

Disagree with existing narratives? Create your own in under 3 minutes - extraordinary investment returns rarely come from following the herd.

• A great starting point for your Broadcom research is our analysis highlighting 2 key rewards and 2 important warning signs that could impact your investment decision.
• Our free Broadcom research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate Broadcom's overall financial health at a glance.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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