Broadcom Inc. (AVGO): Among the Semiconductor Stocks Making Impressive Comeback from DeepSeek AI Dip

Broadcom Inc. (AVGO) has been making waves in the semiconductor industry, particularly in the realm of AI chips. Following the DeepSeek AI dip, AVGO has been one of the semiconductor stocks making an impressive comeback. Let's delve into the factors contributing to Broadcom's strong performance and explore the role of strategic partnerships and acquisitions in its growth strategy.



AI Chip Demand and Market Opportunity

Broadcom's AI chip business has seen significant growth, driven by increasing demand from hyperscalers like Google, Meta, and TikTok. The company's custom AI accelerators are in high demand, with a market opportunity of $60 billion to $90 billion by 2027. This strong demand is expected to continue, making this trend sustainable.



AI Chip Leadership and Customer Engagement

Broadcom is the second-largest global AI semiconductor supplier and the largest custom chip ASIC supplier. This leadership position has allowed the company to secure significant design wins and expand its AI customer engagement base to six customers from five. With a pipeline of $150 billion in cumulative AI revenue opportunity over the next 4-5 years, Broadcom is well-positioned to maintain and grow its market share in the AI chip market.

Strong Software Infrastructure Business

Broadcom's VMware business has shown strong momentum, with robust software renewals from large corporate customers. This has contributed to the company's overall growth and is expected to continue. Additionally, Broadcom's aggressive approach to creating synergies and value in its software business is expected to continue contributing to its growth.

Strategic Partnerships and Acquisitions

Strategic partnerships and acquisitions have played a significant role in Broadcom's growth strategy, contributing to its recent success. In January 2025, Broadcom announced a strategic partnership with a leading cloud service provider, expected to drive growth in AI-related revenue. Additionally, Broadcom's partnership with leading hyperscalers like Meta and Alphabet has positioned it as a leader in AI-related ASICs, with a strong customer base.



In 2024, Broadcom completed an acquisition of an AI-driven software firm, helping it expand its software infrastructure business and boost its dividend growth. In 2023, Broadcom acquired VMware, a leading provider of virtualization and cloud infrastructure software, providing it with a strong software renewal business and contributing to its revenue growth.

Validation with Data

Broadcom's AI-related revenue is expected to grow significantly, potentially reaching $20 billion by 2027, driven by strong demand in the data center and networking segments. Additionally, Broadcom's revenue for the fiscal second quarter of 2024 rose 43% year-over-year to $12.48 billion, with earnings of $10.96 per share, beating estimates. These data points validate the role of strategic partnerships and acquisitions in Broadcom's growth strategy, as they have contributed to its strong financial performance and revenue growth.

In conclusion, Broadcom Inc. (AVGO) has been making an impressive comeback following the DeepSeek AI dip, driven by strong AI chip demand, market opportunity, and leadership. Strategic partnerships and acquisitions have played a crucial role in Broadcom's growth strategy, enabling it to tap into new markets, diversify its revenue streams, and drive strong financial performance. With a bullish outlook on the AI chip market and a robust software infrastructure business, Broadcom is well-positioned for future growth.