Once Broadcom starts shipping Tomahahawk Ultra, do I have to buy, sell, or hold Avgo stock?
Broadcom (AVGO) stock is in the spotlight as Semiconductor Giant begins shipping its groundbreaking Tomahawk Ultra Ethernet Switch, designed for AI and high-performance computing workloads. Tomahahawk Ultra is the latest innovation for AI and high-performance computing, with analysts bullish ahead of its launch.
The new switch offers industry-leading performance and features switch laying per second per 51.2 terabit with 250 nanosecond switch latency, addressing the extreme demands of a tightly coupled AI cluster. Major innovations include ultra-low latency switching, an adaptive Ethernet header that reduces overhead from 46 bytes to just 10 bytes, and lossless fabric technology that eliminates packet drop.
“We’re committed to providing a range of services to our customers,” said Kunjansovani, lead semiconductor analyst at Bloomberg Intelligence.
100% PIN compatibility with Tomahahawk Ultra’s predecessors ensures rapid deployment, but features such as assemblies within the network reduce AI workload completion time by performing operations directly within the switch chip.
With AI infrastructure spending continuing to skyrocket and Broadcom is at the heart of this transformation, the launch of Tomahahawk Ultra could be a key catalyst for stock performance in the coming quarters.
In the second quarter of fiscal year 2025 (ends in April), Broadcom reported record revenues of $15 billion, up 20% year-on-year, driven by explosive growth in AI semiconductors and the continued momentum from the acquisition of VMware. The semiconductor giant’s AI revenue reached $4.4 billion, up 46% from the previous year, marking its ninth consecutive strong performance.
CEO Hock Tan highlighted Broadcom’s dominant position in AI networking. This currently accounts for 40% of AI revenue, an increase of over 170% from the previous year. “Ethernet-based AI networking is robust and remains a preferred choice for hyperscale customers,” Tan said, highlighting the role of Ethernet as a standard for both scale-out and scale-up deployments.