Broadcom Joins $1 Trillion Market Cap Club as Stock Soars on AI Demand

Key Takeaways

Shares of Broadcom (

AVGO

) soared on Friday, launching the chipmaker into the small club of public companies worth more than $1 trillion.

Broadcom shares were up more than 20% at about $220 in early trading Friday, putting the company’s market capitalization at just over $1 trillion. Broadcom is just the ninth U.S. company to reach the milestone, and is the second semiconductor company to do so. Nvidia (

NVDA

) became the first when it hit $1 trillion last year, and its market cap has since surpassed $3 trillion.

With Friday’s jump, Broadcom stock has nearly doubled in value this year. The advanced chip maker has seen its sales and profit soar as tech companies have rushed to develop and deploy custom AI infrastructure. The company on Thursday reported revenue from artificial intelligence
more than tripled
this fiscal year to $12.2 billion.

Chief executive Hock Tan said he sees a “massive” opportunity in AI for Broadcom. The company, he said, is already working with three tech giants on custom AI infrastructure, and could see that revenue stream grow to between $60 billion and $90 billion a year by 2027.

With approximately 4.67 billion shares outstanding, Broadcom stock would need to close above $214.11 to keep its $1 trillion market cap.

Read the original article on
Investopedia