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PALO ALTO - Broadcom Inc. (NASDAQ:AVGO), a semiconductor powerhouse with $57.05 billion in revenue over the last twelve months, announced Tuesday it has begun shipping its new Tomahawk Ultra Ethernet switch, designed specifically for high-performance computing and artificial intelligence applications. According to InvestingPro data, the company maintains an impressive 77.03% gross profit margin, highlighting its ability to invest in cutting-edge technology development.
The 51.2 Tbps switch delivers 250 nanosecond latency while maintaining full throughput capacity, according to the company’s press release. This represents a significant reduction compared to traditional Ethernet switch latency times.
Tomahawk Ultra supports line-rate switching performance at minimum packet sizes of 64 bytes and can process up to 77 billion packets per second. The switch also implements Link Layer Retry and Credit-Based Flow Control technologies to create what Broadcom describes as a "lossless fabric" that eliminates packet loss.
A key innovation is the switch’s ability to reduce Ethernet header overhead from 46 bytes to as low as 10 bytes while maintaining full Ethernet compliance, potentially improving network efficiency for data-intensive applications.
The device also features in-network collective operations, allowing the switch to execute functions like AllReduce directly within the switch chip rather than requiring these operations to be handled by processors.
"Tomahawk Ultra is a testament to innovation, involving a multi-year effort by hundreds of engineers who reimagined every aspect of the Ethernet switch," said Ram Velaga, senior vice president and general manager of Broadcom’s Core Switching Group, in the press release. This innovation comes as Broadcom continues to strengthen its market position, with its stock trading near its 52-week high and maintaining a market capitalization of $1.3 trillion.
The company also introduced SUE-Lite, an optimized version of its Scale-Up Ethernet specification designed for accelerator applications with reduced power consumption and silicon footprint requirements.
Tomahawk Ultra is pin-compatible with the previous Tomahawk 5 model, which Broadcom states will enable faster market deployment. The switch is currently shipping for deployment in rack-scale AI training clusters and supercomputing environments. For investors seeking deeper insights into Broadcom’s market position and growth potential, InvestingPro offers an extensive research report with 18 additional investment tips and comprehensive financial analysis, helping you make informed investment decisions in the competitive semiconductor sector.
In other recent news, Broadcom has been the subject of several noteworthy developments. Oppenheimer has raised its price target for Broadcom to $305, citing the company’s expanding earnings power and stable industrial exposure. Meanwhile, Goldman Sachs initiated coverage on Broadcom with a Buy rating and a $315 price target, highlighting the company’s strong position in infrastructure software. JPMorgan reiterated its Overweight rating with a $325 price target, noting strong AI demand and progress in product development. Mizuho also reiterated an Outperform rating, projecting significant growth in Broadcom’s AI business and expecting industry-leading margins by 2026.
In a separate development, Broadcom has abandoned plans to build a microchip plant in Spain after negotiations with the Spanish government fell through. The reasons for the collapse of talks were not disclosed. These recent developments reflect Broadcom’s strategic focus on expanding its semiconductor and AI capabilities while navigating global challenges in manufacturing.
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