Could This New Chip Be a Game Changer for Broadcom Stock?
Yahoo Finance ·
Shares of custom chipmaker Broadcom ( AVGO +1.09% ) have been under pressure of late. They're up about 8% for the year, but it wasn't all that long ago that the stock was flying much higher, at nearly $500. As of Monday's close, however, it was at just $372 -- down 25% from its recent high. The company, however, did announce a new custom chip that could lead to some exciting growth opportunities ahead for the business, focused on inference. Could this be the catalyst that could lift the tech stock to new heights? Last week, Broadcom unveiled a chip that could spice up its growth, called Jalapeño. It's a chip that centers around OpenAI's vision for artificial intelligence (AI), and that's designed for large language models (LLMs). The processor is modeled to meet the needs of agentic AI workloads, which have been growing in importance as tech companies have developed cutting-edge models that are now able to take on multi-step processes, focusing more on inference rather than development. Broadcom says that while it is still in testing, Jalapeño's per-watt performance is "substantially better than current state-of-the-art." This is key for not only OpenAI, which owns the popular ChatGPT chatbot, but also other companies that are investing heavily in AI and that need greater efficiency. This can unlock significant revenue from OpenAI, and it could help Broadcom develop similar chips for companies involved with other chatbots .
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