Broadcom on Tuesday announced that it is now shipping its latest data-center switch chip, which has double the bandwidth of any Ethernet switch currently on the market. Meanwhile, Broadcom stock hit a buy point.
Broadcom said its Tomahawk 6 switch delivers 102.4 terabits per second of Ethernet switching capacity in a single chip. It is designed for the demands of data centers running clusters of artificial intelligence processors.
The Palo Alto, Calif.-based company said Tomahawk 6 is built to power the next generation of AI networks, ramping to 1 million-plus processors. It offers unprecedented scale, energy efficiency and AI-optimized features, Broadcom said.
"Tomahawk 6 is not just an upgrade — it's a breakthrough," Ram Velaga, senior vice president and general manager of Broadcom's core switching group, said in a news release. "It marks a turning point in AI infrastructure design, combining the highest bandwidth, power efficiency, and adaptive routing features for scale-up and scale-out networks into one platform."
Tomahawk 6 offers the industry's most comprehensive set of AI routing features and interconnect options, Broadcom said.
Of significance is that the Tomahawk 6 is based on open standards. Customers aren't locked into a proprietary network switch technology, such as those promoted by Nvidia.
Switch and networking technologies are critical to AI data centers because they enable collections of processors, such as graphics processing units, to work together to create a massive supercomputer, Velaga told Investor's Business Daily.
"You need to connect all of these GPUs together so that they're acting as one large system," he said. "That's where networking plays a role."
Broadcom Stock Is On Three IBD Lists
A benefit of Broadcom doubling the bandwidth with its Tomahawk 6 chips is that it reduces the number of networking devices needed to run a system, Velaga said. The reduction also lowers power consumption and increases reliability.
Tomahawk 6 chips are produced at 3-nanometer scale by foundry Taiwan Semiconductor Manufacturing, better known as TSMC. The predecessor series, Tomahawk 5, was produced at 5-nanometer scale by TSMC. The semiconductor industry measures circuit widths on chips in nanometers, which are one-billionth of a meter.
On the stock market today, Broadcom stock rose 3.3% to close at 256.85. With the advance, Broadcom stock broke out of a 24-week consolidation pattern at a buy point of 251.88, according to IBD MarketSurge charts.
In the past week, at least six Wall Street firms have raised their price targets on Broadcom stock ahead of the company's fiscal second-quarter report, due out late Thursday.
On Monday, Citi analyst Christopher Danely reiterated his buy rating on Broadcom stock and upped his price target to 276 from 210.
In a client note, Danely said he expects Broadcom to report results above consensus estimates, driven by continued AI strength.
Broadcom stock is on three IBD lists: Leaderboard, Big Cap 20 and Tech Leaders.
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