Broadcom Inc. (NASDAQ:AVGO) is pushing deeper into the artificial intelligence infrastructure race, unveiling a new high-speed networking chip designed to move massive volumes of data more efficiently inside AI data centers.
The company is also partnering on advanced cooling technology to help manage the intense heat generated by next-generation AI processors.
Broadcom Launches New Chip For AI Data Centers
Broadcom announced on Wednesday that it had introduced a new chip designed to help move large amounts of data more efficiently inside data centers that support AI.
The new product, called Taurus BCM83640, enables equipment makers to build faster, more energy-efficient optical modules for transferring data between servers and networking systems.
Broadcom said the chip can support 1.6-terabit data modules, which help data centers handle growing traffic from AI applications. These modules can move twice as much data per connection as previous designs, helping data centers increase overall network capacity.
The company said the technology could also support future systems capable of handling even larger data loads, including 3.2-terabit modules.
Broadcom has started providing samples of the Taurus BCM83640 to selected customers and partners.
Cooling Partnership Targets Rising AI Heat Challenges
Separately, JetCool, a Flex Ltd. (NASDAQ:FLEX) company, said it is working with Broadcom to develop liquid cooling technology for next-generation AI chips.
The collaboration aims to help manage the large amounts of heat produced by powerful AI processors used in data centers.
JetCool designed a cooling system that sends liquid directly to the chip to remove heat and keep the systems running reliably.
Flex will support large-scale manufacturing of the cooling equipment, while Broadcom provides the AI chips used in the systems.
The companies said the partnership is designed to help data centers operate powerful AI hardware more efficiently as computing demands continue to rise.
Strong AI Demand Boosts Earnings And Analyst Outlook
Broadcom shares also gained support after the company reported strong quarterly results driven by rising demand for AI chips.
The chipmaker posted fiscal first-quarter revenue of $19.31 billion, up 29% year over year, while AI-related revenue jumped 106% to $8.4 billion.
Broadcom also said it has secured the high-bandwidth memory (HBM) and advanced-node manufacturing capacity at Taiwan Semiconductor Manufacturing Co. (NYSE:TSM) needed to support its AI chip production through 2028, easing concerns about potential supply shortages.
CEO Hock Tan said the company expects AI chip revenue to exceed $100 billion in 2027, driven by demand from major customers including Alphabet Inc.’s (NASDAQ:GOOGL) Google, OpenAI, Anthropic, and Meta Platforms Inc. (NASDAQ:META).
Following the results, several analysts raised their price forecasts on the stock.
JPMorgan’s Harlan Sur reiterated an Overweight rating and lifted his forecast to $500 from $475, while Goldman Sachs’ James Schneider maintained a Buy rating and increased his forecast to $480 from $450.
Rosenblatt’s Kevin Cassidy also raised his forecast to $500, and Benchmark’s Cody Acree reiterated a Buy rating with a $485 price forecast, citing strong AI demand and Broadcom’s secured supply chain.
AVGO Price Action: Broadcom shares were up 0.59% at $344.71 at the time of publication on Wednesday, according to Benzinga Pro data. The shares have gained over 78.50% over the past 12 months.
Photo by Piotr Swat via Shutterstock
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