Bank of America says Broadcom could be the next trillion-dollar company, but rival Nvidia will still be 3 times bigger.

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Chipmakers powering the artificial intelligence revolution have become stock market darlings. And while Nvidia is, so far, the undisputed winner of the chip wars, it may soon face a formidable challenger.

Broadcom, an American semiconductor maker, announced a 10-to-1 stock split and better-than-expected earnings in its second-quarter earnings report on Wednesday. In the report, Broadcom also projected sales of $51 billion for fiscal 2024, slightly higher than expected. Shares traded higher later in the day and were trading around $1,740 by 3 p.m. ET on Friday—up nearly 16% from their Wednesday opening close of $1,500.

In a note to investors Thursday, Bank of America raised its price target for Broadcom shares to $2,000 and raised its forecast for fiscal 2025 sales to $59.9 billion, the year 16% increase per year. BofA cited last year's sale of Semiconductor and its acquisition of software firm VMWare.

“We buy, consider this a top AI pick” with Nvidia, the analysts wrote, citing Broadcom's potential growth in custom chips, Ethernet networking, and VMWare upsells.

If BofA's forecast comes true, it would push Broadcom's market cap past $1 trillion and join an exclusive club currently held by only six firms: Microsoft, Apple, Nvidia, Amazon, Alphabet, and Meta.

Nvidia, valued at close to $3.25 trillion, is the only chipmaker to reach a 13-figure market cap. In the past week alone, it has overtaken both Amazon and Alphabet, and in the last week has slipped past Apple into second place behind Microsoft.

The dominance of Nvidia, a company unknown to many consumers, is both simple and complex. The short answer is that it produces chips that are becoming essential for every corner of the economy. The long answer is that for the past 15 years, developers have built code around Nvidia's CUDA architecture, making it harder to open.

Last year, more than $4 billion was invested in 93 separate efforts to do just that, according to Pitchbook. And earlier this year, the Unified Acceleration Foundation, or UXL, was formed by Intel, Google, Arm, Qualcomm, Samsung, and other tech companies to develop open-source software to free AI developers under CUDA. was

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