Chipmaker Broadcom (AVGO) has announced updates to its custom-semiconductor production capabilities as it seeks to capture more of the artificial intelligence (AI) market. Generate AI heavily uses semiconductors, and Broadcom is filling that need with its new 3.5D XDSiP tech. This allows custom chips with increased memory and direct connection to components, improving performance and faster speeds.
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Broadcom is working on these new custom chips with Taiwan Semiconductor Manufacturing (TSM). That includes taking advantage of the company’s chip-on-wafer-on-substrate process. The two will create five different products as part of this combination, with shipments expected to start in February 2026.
What This Means for Broadcom
With this new tech, Broadcom can continue to grow its place in the AI chip space. This will help it fend off rivals, such as Nvidia (NVDA), with its ability to create custom chips. That’s also likely to contribute to increased revenue at the company, which upped its 2024 AI chip revenue guidance to $12 billion in September.
Considering shipments of these new chips aren’t set to start until 2026, it will be some time before investors see the effects of today’s news on Broadcom’s earnings. Even so, demand for AI chips will likely continue over the next couple of years, making for an interesting 2026 earnings report.
Shares of AVGO stock are up 0.57% as of this writing, showing a slight interest from investors in this news. More importantly, this continues positive movement for Broadcom, with its shares up 54.97% year-to-date and 92.32% over the last 12 months.
Is AVGO Stock a Buy, Sell, or Hold?
Turning to Wall Street, the analysts’ consensus rating for Broadcom is Strong Buy based on 21 Buy ratings over the last three months. With that comes an average price target of $202.12, a high of $240, and a low of $170. This represents a potential upside of 18.20% for AVGO shares.
