Losing steam in recent weeks, Nvidia (NVDA)  stock has now dipped 4% from a 52-week peak of $184 a share, which it hit in early August. Monday’s report of an antitrust probe in China weighed on Nvidia stock in early morning trading, extending a slight decline over the last few weeks that stemmed from Broadcom’s (AVGO)  quarterly report showing the company is becoming a credible challenger to other dominant AI chip leaders.Amid increased demand for Broadcom’s custom XPU chips, more pressure is potentially mo ...

Core Insights - Broadcom's fiscal Q3 results exceeded expectations, leading to a stock surge of up to +16% and reaching a new 52-week high of $356 per share [1] - The company is emerging as a credible competitor in the AI chip market, impacting the stock prices of Nvidia and AMD [1][2] Financial Performance - Broadcom reported record Q3 sales of $15.95 billion, a 22% increase from $13.07 billion in the same quarter last year, surpassing estimates of $15.82 billion [3] - AI semiconductor revenue rose 63% year-over-year to $5.2 billion, with VMware contributing $6.8 billion to the overall sales [3] - Q3 earnings per share increased 36% to $1.69, exceeding expectations of $1.66 [4] - Adjusted EBITDA for Q3 spiked 30% to $10.7 billion, while free cash flow soared 47% to $7 billion [4] Future Outlook - Broadcom raised its Q4 revenue guidance, expecting sales to increase 24% to $17.4 billion, above the Zacks Consensus of $16.96 billion [10] - The company forecasts Q4 AI revenue to grow to $6.2 billion, marking 11 consecutive quarters of growth [10] Product Development - Broadcom's advancement in AI is driven by its custom XPU chips, designed for high-performance computing workloads [6] - The company secured $10 billion in XPU orders from a new customer, speculated to be OpenAI, expanding its client base beyond major players like Meta and Alphabet [9] Valuation Metrics - Following the stock rally, Broadcom trades at a forward earnings multiple of 46.1X, which is a premium compared to Nvidia and AMD at 39.7X and 41.1X, respectively [12] - The price-to-forward sales valuation stands at 24X, comparable to Nvidia but significantly higher than AMD's 8.8X [12]

President Trump's announcement of tariffs on imports from countries worldwide has rocked the stock market -- and the tech-heavy Nasdaq Composite (^IXIC 12.16%) has led the decline, crashing more than 20% from its most recent high.Why are tech stocks being hit so hard? These companies rely on production of parts and finished goods in countries around the world, from China to India -- and the companies now will have to pay the new import duties as they bring these items into the U.S.All this has prompted inve ...

The Nasdaq, an index that led overall stock market gains over the past two years, has done just the opposite over the past few weeks. The tech-heavy benchmark fell into correction territory, dropping more than 10% from its most recent peak on Dec. 16. The reason for this major turnaround? With concern mounting about the impact of President Trump's tariffs on the economy and corporate earnings, some investors have shifted out of growth stocks -- including artificial intelligence (AI) players. Growth companie ...