Broadcom Inc.'s stock built on its record gains from Friday, and one analyst sees the rally as evidence of the company's own "Nvidia moment."
Shares of Broadcom $(AVGO)$ rose 11.2% on Monday after soaring 24.4% in Friday's session for their largest single-day percentage gain on record. That Friday rally amounted to $206 billion in market-capitalization gains, the sixth-largest one-day gain for any U.S. company on record, according to Dow Jones Market Data. The stock is now on track for its best monthly performance ever, up more than 50% over the course of December to date.
Broadcom was already a roughly $800 billion company before that surge into the $1 trillion camp, and eye-popping gains for a sizable artificial-intelligence semiconductor play might be giving Wall Street Nvidia Corp. $(NVDA)$ flashbacks. Broadcom's "robust AI story is finding its own 'Nvidia moment' with a likely sharp new product ramp into [the second half of] 2025, and outlook for material opportunity ... a few years out," Bernstein's Stacy Rasgon wrote on Monday.
He wrote of the company's projection for a $60 billion to $90 billion serviceable addressable market in AI come fiscal 2027, based on the current lineup of hyperscale customer deployments. Management mentioned the market could be bigger if more companies in discussions with Broadcom get on board.
Rasgon called Broadcom his top pick within semiconductors, touching on various elements of the company's story. As is the case for many other companies in the sector, Broadcom's core business outside of AI "remains fairly lousy," according to Rasgon. But "the core semi set-up into 2025 looks better given some signs of improvement and easy compares," he added.
Additionally, Broadcom is "currently killing it on VMware which (now a year into the completed deal) is markedly exceeding expectations" on numerous fronts," Rasgon wrote.
He's upbeat about Nvidia as well, saying that investors "still have to be there" when it comes to the stock.
"2025 seems likely to be an exceedingly good year," Rasgon said. "We get worries on 2026 of course, but right now spending and purchase intention from customers appears off the charts (so the only ones worried seem to be investors, not the ones actually spending the money)."