Broadcom soars as rave reviews for Gemini 3 boost appeal of its custom chips
When spectators saw Michael Jordan blossom as a basketball star, it made them want to buy Nike’s Air Jordans.
Mizuho reckons there’s a similar halo effect for Broadcom based on the rave reviews for Google’s latest GenAI model, which include this ringing endorsement from Salesforce CEO Marc Benioff.
“Gemini 3 was trained and powered on Google homegrown TPU chips, which benefits partner AVGO,” wrote Daniel O’Regan, Mizuho’s managing director of equity trading.
Custom chips (ASICs) are Broadcom’s specialty, and as O’Regan noted, Google and Broadcom codesigned these building blocks for Gemini 3. Boosts to Google’s capex budget have tended to buoy shares of Broadcom, since it’s a big beneficiary of these outlays.
The early positive reception to Gemini 3 implies that: a) Google will want to continue this relationship (and need more chips for training and inference!), and b) other GenAI developers might be more willing to pursue the custom chip route for AI models and inference, perhaps eating into market share for Nvidia’s GPU-based solutions.
To this end, Broadcom announced a collaboration with OpenAI in mid-October to develop and deploy 10 gigawatts of custom AI accelerators.
Nvidia CEO Jensen Huang has argued that GPU-centric data center solutions are superior because of how ubiquitous the firm’s CUDA software is in high-performance computing.
