Broadcom dips after report that Alphabet’s turning elsewhere for custom AI chips
Shares of Broadcom are slumping to open the week after The Information reported that search giant Alphabet aims to work with MediaTek to help develop AI chips. That would cut into some revenue opportunities for the chip giant, which is a massive player in application-specific integrated circuits (or ASICs).
This move, if true, “increases competitive pressure on Broadcom, raising the potential for share loss at its longest-standing AI chip partner,” Bloomberg Intelligence analysts Kunjan Sobhani and Oscar Hernandez Tejada wrote. “Still, any material revenue impact for Broadcom isn’t likely until 2027 or later.”
The VanEck Semiconductor ETF is still treading water today despite losses in excess of 1% for not only Broadcom but also Nvidia, as of 12:12 p.m. ET, thanks in part to a big gain from Intel as its new CEO continues to be well received by investors.
On a closing basis, this combination of SMH up with Nvidia and Broadcom down more than 1% has happened only five times in the more than 11-year history of this ETF.
