Jim Cramer Said This AI Firm Has More Orders Than “Almost Anybody” Other Than NVIDIA
Broadcom Inc. (NASDAQ:AVGO) is a custom chip designer that is heavily involved in the AI industry. The firm is competing with NVIDIA by providing custom AI chips to other major technology companies. Recently, Broadcom Inc. (NASDAQ:AVGO) CEO Hock Tan emphasized the strong and durable demand for AI compute infrastructure during an appearance on CNBC's Mad Money.
Tan refuted the notion of an AI slowdown, stating there would be no slowdown. He expressed confidence in the demand for AI compute infrastructure, highlighting Broadcom Inc. (NASDAQ:AVGO) as one of the key players in this area. He indicated that the company has more orders than "almost anybody other than NVIDIA."
The CNBC host, Jim Cramer, expressed optimism regarding Broadcom Inc. (NASDAQ:AVGO)’s strong order growth. This optimism is further supported by Broadcom Inc. (NASDAQ:AVGO)’s impressive third quarter earnings, which showed an 86% increase in revenue, a 221% surge in AI semiconductor revenue, and guidance for an 186% annual AI revenue growth for fiscal year 2026.
Despite the positive outlook, Broadcom Inc. (NASDAQ:AVGO) missed analyst estimates for the fourth quarter in terms of revenue, with a guidance of $34.8 billion falling short of the anticipated $35.03 billion. Additionally, the firm experienced a five point annual drop in gross margin due to an increased mix of XPU sales, which require more memory chips and are experiencing historic prices due to high AI demand.
Furthermore, a significant portion of the firm's future XPU deployment (71%) is expected to rely on OpenAI and Anthropic, potentially causing headwinds for the company.
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