Broadcom has joined the "club" of companies with capitalization over $2 trillion. There are only six of them

The market value of the manufacturer of chips for data centers and cloud services Broadcom has exceeded $2 trillion as a result of growth of quotations to a record level, MarketWatch writes. Now there are six companies with capitalization exceeding this mark in the world.

Broadcom shares jumped 5% in trading on Wednesday, April 22, closing at a new all-time high. As a result, the chipmaker was included in the list of six companies whose market value exceeds $2 trillion, including Nvidia, Alphabet, Microsoft, Amazon and Apple, according to Dow Jones Market Data.

On Thursday, April 23, Broadcom quotes added another 1.1%. In total, over the past month, its capitalization increased by 38%.

Broadcom shares were boosted April 22 by Google's unveiling of its eighth-generation TPU tensor processor co-developed with Broadcom, Seaport Research analyst Jay Goldberg told MarketWatch. The two tech giants' agreement to develop TPUs and supply networking equipment runs through 2031.

According to Goldberg, the market has long debated whether Broadcom is losing its share of Google's orders in favor of Taiwanese mobile chip maker MediaTek or U.S. semiconductor and networking developer Marvell. The announcement itself "doesn't prove anything" but is seen as a positive signal for Broadcom, he explained.

Morningstar analyst William Kerwin recalled that Wednesday was "definitely a good day for semiconductor companies" overall. The iShares Semiconductor ETF added about 3%. Shares of memory makers Micron Technology and SanDisk soared more than 8%. The PHLX Semiconductor Index has risen for 16 consecutive sessions, the longest streak in its history, CNBC noted.

Kerwin estimates that Broadcom, as the "leading and dominant developer" of TPUs for Google, could benefit from higher prices and increased shipments due to the upcoming release of new chips. Each new generation of TPU has a higher price tag because of the expanded memory capacity, he said. AI processor revenues are the main driver of Broadcom's growth and valuation, the analyst added. In his view, the fair value of the company's stock is $500. This target implies an upside of 18.3% relative to the last closing price.

Wall Street almost unanimously advises to buy Broadcom shares - 51 analysts out of 54 covering these securities gave bullish recommendations. The remaining three took a neutral stance, suggesting to hold the chipmaker's shares in the portfolio. The average target price is $473, which corresponds to a potential upside of about 12% over a 12-month horizon.

This article was AI-translated and verified by a human editor