This “Back of the Pack” AI company just caught up with the leaders…

Last week we had some crazy news in the AI world.

Broadcom (AVGO) announced their quarterly earnings. To say it was a shock - would be an enormous understatement.

First, do you have any idea what Broadcom does?

They make semiconductor chips.

Normally this is a boring industry dominated by tech giants like IBM, TSMC, and a handful of other big companies.

To build a semiconductor plant costs BILLIONS.

I’ve driven past the new TSMC plant being built in Phoenix, AZ. Let me tell you, this is a huge complex, with dozens of buildings… The size of the place is just crazy.

And these huge buildings are being filled with billions of dollars of high tech equipment.

Broadcom, runs what’s known as a “Fabless” chip company. In other words, they don’t make the product. They let the “Fabs” or chip plants be run by experts - and they outsource production. Broadcom does the design and development and sales of the semiconductor chips.

It’s a very efficient model for chip production… because you don’t have to spend billions on building and upkeep of a giant facility.

So what makes Broadcom so special? Why are we talking about them today?

Just take a quick look at their stock chart…

The stock ROCKETED higher from $180 a share to over $240!

It’s more than a 40% gain in the last month! The stock is up almost 100% this year…

Of course, this was all driven by a critical AI announcement.

You can read the whole earnings report here.

But let me break it down for you…

First - AVGO is a weird company in that they have a fiscal year that ends around the end of October, instead of December. Strange, but whatever.

What they announced for the year end… Company revenue was UP 44% this year. A staggering number for a company doing $51.6 Billion in sales.

But that wasn't even the highlight!

The real shocking (in a good way) announcement was the Semiconductor sales reached over $30 Billion - a record. Of the $30 Billion - $12.2 Billion was for their advanced AI chips.

AI chip sales surged 220% year over year!

Now we all know AI chips are in high demand and semiconductor companies can basically set their price.

What really caught the eye of Wall Street was what came next…

Broadcom CEO Hock Tan said, “We see our opportunity over the next three years in AI as massive.”

Then what he said next blew the doors off…

The company believes its custom AI chips will generate between $60 billion and $90 billion in revenue over the next three years - from just 3 customers. And they’re working with 2 other new customers.

It’s a staggering amount of money for the company and its AI products.

Consider this - the company reported NON-GAAP net income for the year of $23 Billion… Which implies their “profit margin” is around 45%.

Broadcom now has over a Trillion dollars in market cap.

Are you a buyer of this stock?

Given the recent news, I think we could see the stock double again next year!