Quick Read Broadcom (AVGO) supplies custom AI chips for Alphabet‘s Tensor Processing Units. Alphabet plans to nearly double capex to $175B-$185B in 2026. Broadcom AI semiconductor revenue hit $6.5B in Q4 with 74% year-over-year growth. Broadcom projects AI chip revenue will grow 100% in Q1 to reach $8.2B. A recent study identified one single habit that doubled Americans’ retirement savings and moved retirement from dream, to reality. Read more here. Alphabet (NASDAQ:GOOG)(NASDAQ:GOOGL) reported fo ...

Alphabet (GOOG) (GOOGL) will release its fourth-quarter financial results on Wed., Feb. 4. Heading into the earnings, Alphabet stock has surged 81.35% over the past six months, reaching a fresh high of $344.83 today. Alphabet stock has got a significant boost from its growing artificial intelligence (AI) capabilities and AI-driven momentum across its businesses. November's launch of Gemini 3 has strengthened Google’s position in the AI space. Further, investors’ optimism has also been supported by Alphabe ...

For months, the OpenAI number that’s been floating around has sounded like a single, cinematic act: $100 billion, said like it’s a wire transfer and not a multiyear construction project. Over the weekend, Huang did what CEOs do when a number gets too loud: He turned it back into a process. He told reporters in Taipei the proposed $100 billion investment was “never a commitment,” and described OpenAI’s ask as an invitation to invest “up to $100 billion,” with Nvidia taking it “one step at a time.”Put these t ...

Jensen Huang wants you to know the AI industry isn't a bubble—despite looking like a bubble. At the World Economic Forum in Davos this week, the Nvidia CEO told BlackRock's Larry Fink that the infrastructure powering artificial intelligence needs "trillions of dollars" more investment over the coming years. The alternative? Ultimate failure. Huang framed AI as a "five-layer cake" that starts with energy at the bottom, then chips, cloud infrastructure, AI models, and finally applications at the top. Each ...

Core Insights - The AI revolution has rapidly expanded since 2023, significantly increasing market value and driving demand for specialized hardware and data centers [2] - Supply chain bottlenecks, particularly in advanced manufacturing, are limiting the scalability of new AI capabilities [3] - Taiwan Semiconductor Manufacturing is a critical player in determining the pace of AI expansion due to its control over advanced packaging technology [5] Company-Specific Developments - Alphabet has reduced its 2026 production target for Tensor Processing Units from approximately 4 million to 3 million units due to limited access to Taiwan Semiconductor's CoWoS advanced packaging capacity [4][7] - Nvidia has secured over half of Taiwan Semiconductor's CoWoS capacity through 2026 and 2027, giving it a competitive advantage in scaling AI accelerators [5][6] - The competition among chipmakers for production capacity at Taiwan Semiconductor is intensifying, with companies like Google facing constraints in scaling their output [6][7]

Core Insights - The AI landscape is evolving, with companies like Alphabet and Broadcom developing specialized AI chips, reducing reliance on Nvidia, which remains a leader in AI hardware [1][2] - The initial "Magnificent Seven" (Mag 7) stocks, which included major tech players, are showing signs of underperformance compared to emerging AI-focused companies [5][11] - Companies like Micron and Credo Technology have demonstrated significant revenue and earnings growth, outperforming many of the Mag 7 stocks [6][7][9] Group 1: AI Market Dynamics - The AI buildout is accelerating, revealing new beneficiaries beyond the traditional tech giants [2] - Only Alphabet and Nvidia have generated excess returns against the market benchmark, indicating a maturing AI trend [3][5] - The Mag 7 stocks, initially seen as a one-trade opportunity, are now facing challenges in maintaining growth [4][10] Group 2: Performance Metrics - In Q3 2025, Micron reported a 57% sales growth and 167% EPS growth, while Credo Technology saw a remarkable 272% sales growth and 857% EPS growth [8] - The Mag 7 stocks showed modest growth, with Nvidia leading at 62% sales growth and 60% EPS growth, while Tesla experienced a decline in EPS by 31% [9] - The overall performance of the Mag 7 stocks lagged behind the S&P 500, which rose by 16.4% last year [3][5] Group 3: Future Projections - Capital expenditures for major hyperscalers are projected to reach $527 billion in 2026, indicating a significant increase in investment in AI infrastructure [12] - Companies are increasingly turning to the bond market for financing AI initiatives, with Meta raising $30 billion in bonds [13] - The path to AI monetization is becoming clearer, with companies like Microsoft and Meta already capitalizing on AI features for revenue growth [15][16] Group 4: Investment Strategies - Investors are advised to adopt a tactical approach to technology stocks, focusing on emerging performers rather than relying solely on established giants [19] - The semi equipment manufacturers are highlighted as a potential area for growth, driven by increased demand for semiconductor production [20] - Despite underperformance, owning the entire Mag 7 basket still yielded a 23% gain last year, suggesting a diversified approach may still be beneficial [21]

Core Insights - OpenAI's ChatGPT launch has significantly accelerated AI adoption, prompting businesses to invest heavily in AI infrastructure and innovation [1] Company Overview - Alphabet is a leading player in the AI sector, known for its long-standing dominance in the internet industry [3] - The company develops specialized chips called Tensor Processing Units and operates a robust cloud computing platform through Google Cloud, enhancing corporate access to AI capabilities [3] - Alphabet's Gemini app boasts 650 million monthly active users, showcasing its extensive reach in the AI market [3] Advertising and User Experience - The integration of AI is enhancing the advertising experience for Alphabet's customers and billions of users across its various applications [4] Stock Performance and Valuation - Alphabet's stock has increased by 712% over the past decade, although similar gains are not expected in the next ten years [5] - The stock currently has a forward price-to-earnings ratio of 27.5 and continues to report double-digit earnings growth, which are favorable indicators for investors [5] Investment Considerations - Despite Alphabet's strengths, it was not included in a recent list of the top 10 stocks recommended by the Motley Fool Stock Advisor, which suggests there may be other stocks with higher potential returns [6] - Historical examples of stocks like Netflix and Nvidia, which were recommended by the same advisory service, have yielded substantial returns for early investors [7]

Broadcom is playing down the prospects for Google's Tensor Processing Units to become the dominant AI chips. ...

Core Insights - The investment landscape surrounding the AI boom is heavily focused on hardware providers, particularly Broadcom and Marvell Technology, which are key players in AI infrastructure development [2] - Broadcom has a significant market capitalization of $1.8 trillion compared to Marvell's $80 billion, highlighting a stark difference in scale and market presence [2] - Broadcom's stock has appreciated by 600% since the debut of ChatGPT, while Marvell's stock has increased by 105% during the same period [2] Market Positioning - Hyperscalers are shifting investments towards custom silicon, moving away from general-purpose GPUs to manage costs and reduce reliance on Nvidia [3] - Broadcom operates with a larger customer scale and deeper penetration in the hyperscaler market compared to Marvell, leading to revenue and margin disparities [4] - Broadcom's revenue for FY exceeds $63 billion, while Marvell's revenue is approximately $8 billion, with forward earnings multiples of 41x for Broadcom and 24x for Marvell [9] Financial Performance - Broadcom's chip division generated $9.2 billion last quarter, reflecting a 26% year-over-year growth with 67% EBITDA margins, while Marvell reported around $2 billion in total revenue with 37% year-over-year growth and only 15% operating margins [10][14] - Broadcom's extensive software division, particularly after acquiring VMware, contributes to its high margins and valuation premium, with adjusted EBITDA margins at 67% [13] Competitive Dynamics - Broadcom has established itself as a market leader in custom AI chips (ASICs) and high-speed networking, with significant competitive barriers due to its large clientele [6][8] - Marvell's reliance on Amazon Web Services for custom silicon exposes it to revenue concentration risks, making it vulnerable to fluctuations in a single customer's capital expenditures [11][17] Strategic Initiatives - Marvell aims to close the valuation gap with Broadcom by focusing on growth, technical differentiation, and improving financial metrics [15] - The company is investing in Co-Packaged Optics (CPO) and photonic technologies to enhance its interconnection capabilities, which are critical for AI infrastructure [16] - Marvell's acquisition of Celestial AI is a strategic move to secure expertise in photonics, which could redefine its position in AI infrastructure [19] Future Outlook - To achieve a re-rating, Marvell needs to secure additional Tier-1 hyperscaler partnerships to mitigate revenue volatility and enhance market confidence [19] - The company must also focus on improving high-margin data center revenues and managing costs effectively to reduce the profitability gap with Broadcom [20]

Federal Reserve and Interest Rates - The market anticipates a quarter-point rate cut, with an 85% chance that the FOMC will lower rates by 25 basis points to a range of 3.5%–3.75% [5] - Despite expectations for easing, five of the 12 voting members are publicly against further rate cuts, indicating a divided FOMC [5] - Wells Fargo notes a "critical mass of support" for the doves, but multiple dissents are expected, with the 2026 median dot projected to hold at 3.375% [5] Earnings Reports - Oracle is expected to report EPS of $1.64 on revenue of $16.2 billion, while Broadcom is projected to report EPS of $1.87 on revenue of $17.64 billion [6] - Wells Fargo initiated coverage on Broadcom with an Overweight rating and a $280 price target, citing nearly $500 billion in AI-related deals [6] - Susquehanna highlights Broadcom's strong position in revenue growth driven by AI networking demand and its long-standing partnership with Google [6] Market Commentary - Michael Burry compares OpenAI to Netscape, suggesting it may face a similar decline despite a potential $1 trillion valuation [6] - Burry also draws parallels between Palantir and DiamondCluster, indicating concerns about their long-term viability [6] - The S&P 500 will see Carvana, CRH, and Comfort Systems USA added, while LKQ, Solstice Advanced Materials, and Mohawk Industries will be removed [6]