Broadcom Inc. (AVGO) saw a nearly 5% increase in premarket trading on January 30, 2025, following an announcement from Meta Platforms Inc. (META) about its plans to enhance the use of custom chips developed in collaboration with Broadcom.
During an investor conference call, Meta's CFO, Susan Li, outlined the strategy to increase deployment of the Meta Training and Inference Accelerator (MTIA) chips. Li stated, "We're pursuing cost efficiencies by deploying our custom MTIA silicon in areas where we can achieve a lower cost of compute by optimizing the chip to our unique workloads."
Meta has initiated the deployment of MTIA for its ranking and recommendation inference workloads in 2024, with plans to accelerate adoption for these specific applications by 2025. Furthermore, the company intends to expand its custom silicon initiatives to support training workloads for ranking and recommendations in 2026.
Broadcom's stock is currently trading at $215.76, reflecting a 4.56% increase in the premarket session. Over the past six months, the stock has surged more than 43.78%, driven by optimism surrounding artificial intelligence. Broadcom is expected to release its first-quarter results in March.
Analysts from Morgan Stanley, Barclays, and Mizuho have set an average price target of $255.33 for Broadcom, indicating an 18.38% potential upside. Notably, former House Speaker Nancy Pelosi revealed in June that she purchased call options on Broadcom, which, following a 10-for-1 stock split, now have a strike price of $80 and are set to expire in June 2025.