Broadcom: The Silicon Sorcerer’s Apprentice

Right then. Let’s talk about silicon. Not the sort you find in sandy beaches, mind you, but the stuff that dreams – and increasingly, entire economies – are built upon. Everyone’s been flapping about Nvidia, naturally. It’s like being amazed a particularly shiny goblin has cornered the market in fire starters. Useful, certainly, but hardly the whole story. The real action, the subtle shifts in the magical currents, are flowing towards a company called Broadcom. And, as a concerned shareholder – and, let’s be honest, a bit of a busybody – I feel compelled to point this out.

See, everyone wants more ‘intelligence’ in their machines. Artificial Intelligence, they call it. Sounds grand, doesn’t it? As if you can just add intelligence like sprinkling fairy dust. It’s more like coaxing a particularly stubborn imp to do your bidding. And all this intelligence requires… well, things. Tiny, complicated things made of silicon. Nvidia makes the flashy bits, the ones that shout ‘Look at me!’ But increasingly, the big players – the hyperscalers, as they’re annoyingly called¹ – are realizing that shouting isn’t always the most efficient way to get things done. They’re turning to Application-Specific Integrated Circuits – ASICs – custom chips designed for a specific task. Think of it as commissioning a master craftsman to build you a single, perfect tool, rather than buying a box of vaguely useful implements.

Broadcom, it turns out, is rather good at being that craftsman. They don’t make the flashy bits; they make the essential bits. They take a design – a customer’s mad scribbles on parchment, essentially – and turn it into a working, physical chip. They’re the alchemists of the silicon age, turning ideas into reality, and, crucially, doing it at scale. It’s a surprisingly unglamorous business, but someone has to ensure the magical engines keep humming.

They first made a name for themselves by helping Alphabet (yes, the ones who know everything about you) create their Tensor Processing Units – TPUs.² Clever things, TPUs. And, it turns out, quite lucrative for Broadcom. They’re currently contracted to deliver a staggering $21 billion worth of these to Anthropic. And Alphabet, being the benevolent overlord it is, is now letting others use its TPUs through Google Cloud. It’s a bit like renting out your magical fortress – sensible, if you think about it.

This success has attracted attention. Other hyperscalers – Meta Platforms, TikTok’s parent company ByteDance – are all beating a path to Broadcom’s door. They estimate this represents a potential $60 to $90 billion market by 2027. And, rather cleverly, they’ve even snagged OpenAI as a customer, agreeing to supply custom AI accelerators capable of generating a frankly terrifying 10 gigawatts of computing power. That’s enough energy to power a small kingdom, or at least run a lot of algorithms.

Now, Citigroup analysts – those keen observers of the financial cosmos – predict Broadcom’s AI revenue could surge from around $20 billion this year to over $50 billion next year, and then double to $100 billion by 2027. Given that Broadcom’s total revenue was just $63.9 billion last year, that’s… significant. And let’s not forget their VMware virtualization business, which is doing nicely, and their non-AI semiconductor business, which is showing signs of recovery. It’s a rather impressive portfolio, even if it lacks a certain… sparkle.

So, what does this all mean? Simply this: as AI spending explodes, and companies seek alternatives to Nvidia’s increasingly expensive GPUs, Broadcom is poised to be one of the biggest winners. It’s not about flashy magic; it’s about solid craftsmanship, reliable infrastructure, and a healthy dose of shrewd business sense. And, as a shareholder, I rather like those qualities. It’s a company that understands that sometimes, the most powerful magic is the kind you don’t even notice.

¹ Hyperscalers. A truly dreadful term. It conjures images of monstrous, scale-covered beasts rampaging through data centers. I suspect it was invented by a marketing department desperate to sound important.
² TPUs. Tensor Processing Units. Sounds like something you’d find in a particularly eccentric wizard’s workshop. And, frankly, the resemblance is uncanny.

2026-01-22 03:24

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