Jim Cramer, the host of CNBC’s “Mad Money,” has suggested that Broadcom Inc. (NASDAQ:AVGO) is poised to be the primary beneficiary of a potential deal between Alphabet Inc. (NASDAQ:GOOG) (NASDAQ:GOOGL) and Meta Platforms Inc. (NASDAQ:META).
Cramer Highlights The ‘Hock Tan Connection’
In a post on X on Tuesday, Cramer highlighted Broadcom’s CEO, Hock Tan, who also serves on Meta’s board, as the key factor in this potential win.
“The most likely winner here is Broadcom because that is who Meta would contract with,” Cramer wrote.
Cramer’s post comes in the wake of Monday reports that Alphabet’s Google is in discussions with Meta and other cloud clients about a potential deal that would allow Meta to utilize Google AI chips in its data centers. As per a report, this potential deal is a part of the intensifying rivalry between Google and NVIDIA Corp (NASDAQ:NVDA) as Google wants to position its Tensor Processing Units (TPUs) against Nvidia’s GPUs.
Tan's Role in Broadcom's Rise Against Nvidia
CEO Tan has been a key figure in Broadcom’s rise in the AI hardware race against Nvidia and he has recently been rewarded with an extension of his CEO tenure through 2030.
Despite Nvidia’s dominance in the AI hardware arena, Broadcom has been quietly challenging the company with its smart silicon and hyperscaler-grade networking gear. The chipmaker’s collaboration with Google on the Ironwood TPU (TPUv6, 3 nm) is expected to generate over $15 billion in revenue over its lifetime and has validated Broadcom’s ability to compete with Nvidia’s GPU dominance. Notably, Google has been designing its TPUs since their 2016 debut, but relies on partners like Broadcom to manufacture the older generations, reported CNBC, citing analyst Ben Reitzes from Melius Research.
Tan, meanwhile, became a Meta board member in February 2024, reflecting CEO Mark Zuckerberg's interest in his extensive silicon and energy-infrastructure expertise.
Price Action: On Monday, Google’s parent, Alphabet’s shares surged 6.28% to close at $318.47, while Meta gained 3.16% to close at $613.05. At the same time, Broadcom stock recorded the highest gain at 11.10%. The stock closed at $377.96, near its 52-week high of $386.48, as per data from Benzinga Pro.
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Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
