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Broadcom (AVGO) Strengthens Portfolio With the Launch of Baily
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Broadcom (AVGO - Free Report) recently announced the launch of Bailly, the world’s premier 51.2 terabits per second (Tbps) co-packaged optics (CPO) Ethernet switch. This groundbreaking product integrates cutting-edge silicon photonics technology with Broadcom's renowned StrataXGS Tomahawk 5 switch chip, setting a new standard for efficiency and performance in AI infrastructure.
Bailly represents a significant leap forward in optical interconnect technology, addressing the escalating demands of both front-end and back-end networks in large-scale generative AI clusters.
Pluggable optical transceivers, which currently consume a substantial portion of system power and cost, are revolutionized by Bailly's integration of eight silicon photonics-based 6.4-Tbps optical engines. This integration results in a remarkable 70% reduction in power consumption and an eightfold improvement in silicon area efficiency compared to traditional solutions.
The advent of Bailly couldn’t be timelier as the industry grapples with the escalating bandwidth requirements of next-gen GPUs and the burgeoning sizes of AI clusters. Broadcom’s CPO and silicon photonics technology platform not only meet these demands but exceed them, offering unparalleled advantages in latency, bandwidth density, power efficiency and cost-effectiveness.
Key to Bailly’s success is its high degree of integration, which enables hundreds of optical components and millions of transistors to be seamlessly incorporated into a single optical engine. This integration facilitates the placement of optical engines alongside complex logic ASICs, minimizing the need for signal conditioning circuitry and further reducing power consumption.
Broadcom’s innovative manufacturing approach, leveraging proven CMOS foundry processes and advanced packaging technologies, ensures high-volume production of Bailly. Moreover, AVGO’s collaboration with cloud service providers and system integrators underscores its commitment to accelerating the adoption of CPO platforms, ushering in a new era of power-efficient, cost-effective AI clusters.
The unveiling of Bailly at the Optical Fiber Communication 2024 exhibition marks a significant milestone in Broadcom's ongoing commitment to technological innovation. Broadcom's Bailly represents a paradigm shift in optical interconnect technology, offering unparalleled efficiency, performance and scalability.
Broadcom Rides on Strong AI Demand
Broadcom shares have gained 13.1% year to date, outperforming the Zacks Computer & Technology sector’s return of 12%. It has been benefiting from an extensive range of semiconductor offerings and a diverse portfolio.
AVGO is benefiting from the robust adoption of AI and the strong deployment of generative AI. In the first quarter of 2024, under its semiconductor segment, AI revenues quadrupled year on year to $2.3 billion despite sluggish enterprise and telcos end markets.
Broadcom now expects fiscal 2024 AI revenues of roughly $10 billion (higher than previous guidance of $7.5 billion) and to account for 35% of semiconductor revenues (higher than previous guidance of 25%).
Networking revenues are expected to rally 35% year over year, driven by the accelerating deployment of networking connectivity and the expansion of AI accelerators within hyperscalers.
For fiscal 2024, AVGO still expects revenues of $50 billion and adjusted EBITDA margin of 60%.
The Zacks Consensus Estimate for fiscal 2024 is pegged at $50.34 billion, suggesting growth of 40.55% year over year. The consensus estimate for earnings is pegged at $47.16 per share, up 4 cents over the past 30 days, indicating 11.62% year-over-year growth.
Image: Bigstock
Broadcom (AVGO) Strengthens Portfolio With the Launch of Baily
Broadcom (AVGO - Free Report) recently announced the launch of Bailly, the world’s premier 51.2 terabits per second (Tbps) co-packaged optics (CPO) Ethernet switch. This groundbreaking product integrates cutting-edge silicon photonics technology with Broadcom's renowned StrataXGS Tomahawk 5 switch chip, setting a new standard for efficiency and performance in AI infrastructure.
Bailly represents a significant leap forward in optical interconnect technology, addressing the escalating demands of both front-end and back-end networks in large-scale generative AI clusters.
Pluggable optical transceivers, which currently consume a substantial portion of system power and cost, are revolutionized by Bailly's integration of eight silicon photonics-based 6.4-Tbps optical engines. This integration results in a remarkable 70% reduction in power consumption and an eightfold improvement in silicon area efficiency compared to traditional solutions.
The advent of Bailly couldn’t be timelier as the industry grapples with the escalating bandwidth requirements of next-gen GPUs and the burgeoning sizes of AI clusters. Broadcom’s CPO and silicon photonics technology platform not only meet these demands but exceed them, offering unparalleled advantages in latency, bandwidth density, power efficiency and cost-effectiveness.
Key to Bailly’s success is its high degree of integration, which enables hundreds of optical components and millions of transistors to be seamlessly incorporated into a single optical engine. This integration facilitates the placement of optical engines alongside complex logic ASICs, minimizing the need for signal conditioning circuitry and further reducing power consumption.
Broadcom Inc. Price and Consensus
Broadcom Inc. price-consensus-chart | Broadcom Inc. Quote
Broadcom’s innovative manufacturing approach, leveraging proven CMOS foundry processes and advanced packaging technologies, ensures high-volume production of Bailly. Moreover, AVGO’s collaboration with cloud service providers and system integrators underscores its commitment to accelerating the adoption of CPO platforms, ushering in a new era of power-efficient, cost-effective AI clusters.
The unveiling of Bailly at the Optical Fiber Communication 2024 exhibition marks a significant milestone in Broadcom's ongoing commitment to technological innovation. Broadcom's Bailly represents a paradigm shift in optical interconnect technology, offering unparalleled efficiency, performance and scalability.
Broadcom Rides on Strong AI Demand
Broadcom shares have gained 13.1% year to date, outperforming the Zacks Computer & Technology sector’s return of 12%. It has been benefiting from an extensive range of semiconductor offerings and a diverse portfolio.
AVGO is benefiting from the robust adoption of AI and the strong deployment of generative AI. In the first quarter of 2024, under its semiconductor segment, AI revenues quadrupled year on year to $2.3 billion despite sluggish enterprise and telcos end markets.
Broadcom now expects fiscal 2024 AI revenues of roughly $10 billion (higher than previous guidance of $7.5 billion) and to account for 35% of semiconductor revenues (higher than previous guidance of 25%).
Networking revenues are expected to rally 35% year over year, driven by the accelerating deployment of networking connectivity and the expansion of AI accelerators within hyperscalers.
For fiscal 2024, AVGO still expects revenues of $50 billion and adjusted EBITDA margin of 60%.
The Zacks Consensus Estimate for fiscal 2024 is pegged at $50.34 billion, suggesting growth of 40.55% year over year. The consensus estimate for earnings is pegged at $47.16 per share, up 4 cents over the past 30 days, indicating 11.62% year-over-year growth.
Zacks Rank & Stocks to Consider
Broadcom currently has a Zacks Rank #4 (Sell).
Logitech (LOGI - Free Report) , Meta Platforms (META - Free Report) and Synopsys (SNPS - Free Report) are a couple of better-ranked stocks in the broader sector that investors can consider, each sporting a Zacks Rank #1 (Strong Buy) at present. You can find the complete list of today’s Zacks #1 Rank stocks here.
The long-term earnings growth rate for Logitech, Meta Platforms and Synopsys is currently pegged at 13.13%, 19.5% and 17.51%, respectively.
Shares of Meta Platforms and Synopsys have surged 39% and 6%, respectively, on a year-to-date basis. Logitech shares have declined 1.6% year to date.