Latest news with #ChristopherDanley
Yahoo
05-06-2025
- Business
- Yahoo
Why AI Stock Broadcom Topped the Market on Tuesday
It announced that it started shipping its latest AI chip. The chip is a vast improvement over its predecessor, the company said. Meanwhile, two analysts published bullish updates on the stock. These 10 stocks could mint the next wave of millionaires › A new product rollout is always an attention-grabbing piece of news in the corporate world, and that goes double for businesses involved with artificial intelligence (AI). On Tuesday, specialty chip maker Broadcom (NASDAQ: AVGO) announced it began shipping an advanced networking chip. Investors greeted this by pushing the company's stock up by more than 3% that trading session. That gain easily trounced the 0.6% increase of the S&P 500 index. Broadcom's Tomahawk 6 switch series is now on its way to the market, the company announced that morning (a switch, also known as a switching chip, is a highly specialized component that handles data trafficking through a computer network). According to Broadcom, the Tomahawk 6 boasts double the bandwidth of any switch available on the market just now. It's designed to handle the comparably much higher resource needs of artificial intelligence (AI) functionalities. The company said its new product has an unrivaled set of AI routing features and interconnect options. The announcement came two days before Broadcom is slated to publish its fiscal second quarter of 2025 earnings. What also helped the stock rise was a pair of bullish new analyst notes released in anticipation of those results. Both Citigroup's Christopher Danley and JPMorgan Chase's Harlan Sur maintained their equivalent of buy recommendations in their respective updates. Danley went as far as to raise his price target on the stock significantly to $276 per share from his previous $210. According to reports, Danley believes Broadcom will top analyst estimates for the quarter, especially considering that AI is an important driver of its sales, and demand for the technology remains scorching. I'd be as bullish as those two gentlemen; Broadcom is very well placed to be a main supplier expanding AI capabilities, and its fundamentals should reflect that going forward. Ever feel like you missed the boat in buying the most successful stocks? Then you'll want to hear this. On rare occasions, our expert team of analysts issues a 'Double Down' stock recommendation for companies that they think are about to pop. If you're worried you've already missed your chance to invest, now is the best time to buy before it's too late. And the numbers speak for themselves: Nvidia: if you invested $1,000 when we doubled down in 2009, you'd have $356,261!* Apple: if you invested $1,000 when we doubled down in 2008, you'd have $38,291!* Netflix: if you invested $1,000 when we doubled down in 2004, you'd have $657,385!* Right now, we're issuing 'Double Down' alerts for three incredible companies, available when you join , and there may not be another chance like this anytime soon.*Stock Advisor returns as of June 2, 2025 JPMorgan Chase is an advertising partner of Motley Fool Money. Citigroup is an advertising partner of Motley Fool Money. Eric Volkman has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends JPMorgan Chase. The Motley Fool recommends Broadcom. The Motley Fool has a disclosure policy. Why AI Stock Broadcom Topped the Market on Tuesday was originally published by The Motley Fool
Yahoo
19-02-2025
- Business
- Yahoo
Intel stock pulls back from record rally as analysts note barriers to potential deals with TSMC, Broadcom
Intel (INTC) stock fell 6% Wednesday, ending a massive upswing in which shares notched their biggest five-day gain in its history as a publicly traded company. The decline came as analysts expressed skepticism over recent reports of potential deals with TSMC (TSM) and Broadcom (AVGO) to break up the storied US chipmaker. Shares of Intel had surged 16% Tuesday following a Wall Street Journal report over the weekend that its rival, Taiwan's contract chip manufacturer TSMC, has looked at controlling some or all of Intel's semiconductor factories, potentially as part of an investor consortium. The Journal, citing people familiar with the discussions, also reported that Broadcom (AVGO) is considering making a bid for Intel's product business, which designs semiconductors for computers and servers. A news report the the prior week had indicated that the US was floating proposals to TSMC to support Intel's turnaround. One of the proposals would reportedly establish a joint venture between TSMC and Intel, in which TSMC would send engineers to Intel to ensure its manufacturing business is viable. Investors cheered the reports, with Intel gaining 38.5% over the five days ended Tuesday. But Wall Street analysts have voiced concerns over a potential breakup of Intel. Citi analyst Christopher Danley noted that TSMC and Intel use separate manufacturing processes. Because Intel's chips are specifically designed using its own manufacturing processes, it wouldn't make sense for TSMC to take control of its manufacturing facilities, he said. 'Just because two companies are making the same type of chip, they have completely separate software tools, processes, methodologies, all kinds of stuff,' he told Yahoo Finance in an interview Wednesday. 'These guys that have worked at Intel for 10, 20, 30 years would have to learn completely new processes. It would just be a fiasco.' A TSMC-Intel deal could also face scrutiny from regulators at home and abroad. That's because global regulators, including Chinese authorities would need to approve the deal, and they may have antitrust concerns, Wall Street analysts said. And the Trump administration "could be wary of a foreign entity completely taking over an iconic US-firm," Bank of America analyst Vivek Arya wrote in a note to investors Tuesday. Intel has long designed and manufactured semiconductors for itself, but the company opened up its manufacturing business to external customers — launching what's called a foundry — in 2022. The foundry has failed to take on external customers, analysts say, and its product business has lost market share to rivals. Those struggles have made Intel an acquisition target in recent months. As far as a potential Broadcom bid for that product business goes, Danley said the company would need to buy Intel in its entirety, not just part of it, for such an acquisition to be successful. 'There's a lot of synergies between the manufacturing side and the design side,' Danley said. 'I don't think that breaking up their core business makes sense.' Instead, Danley said, Broadcom could buy the product business and divest Intel's merchant foundry, but keep the company's internal manufacturing division. But Intel isn't likely to favor such deals, Danley, Bernstein analyst Stacy Rasgon and Moor Insights & Strategy's Anshel Sag told Yahoo Finance. That's partly because Intel has insisted that its manufacturing process, which is set to be competitive with TSMC's, is on track for production by the end of 2025. 'I actually don't think it's [Intel's] desperate for cash right now. They've got a few years of runway,' Rasgon said. Analysts also said it wouldn't make competitive sense for TSMC to enter into a joint venture with Intel. 'Why would TSMC help its competitor gain share versus itself? To me that just makes absolutely zero sense whatsoever,' Danley said. Laura Bratton is a reporter for Yahoo Finance. Follow her on Bluesky @ Email her at Sign in to access your portfolio
Yahoo
06-02-2025
- Business
- Yahoo
Arm, Qualcomm stocks fall as investors wait for AI to drive new demand for smartphones, PCs
Arm Holdings (ARM) and Qualcomm (QCOM) stocks each fell more than 4% Thursday as their quarterly results showed signs the AI boom isn't yet driving a surge in demand for the consumer devices powered by the companies' chips. Despite their above-forecast quarterly earnings results the day prior, investors signaled they aren't so patiently waiting to see if artificial intelligence will drive a new wave of demand for consumer devices that rely on the companies' chips. The pair of semiconductor companies — which are, coincidentally, engaged in an ongoing legal battle with one another — saw their stocks drop for various reasons. Arm issued in-line but slightly softer-than-expected earnings guidance for the current quarter, with the company saying it expects adjusted earnings per share of $0.48-$0.56 in its fiscal fourth quarter, versus the $0.53 expected, according to Bloomberg data. Revenue in its current quarter is set to come in between $1.18 billion-$1.28 billion; Wall Street forecasts were for revenue to hit $1.23 billion, the midpoint of that range. Arm also lowered the top range of its revenue outlook for its fiscal year 2025 to $4.04 billion from $4.1 billion, though it raised the bottom of the range to $3.9 billion from $3.8 billion. In other words, wrote Citi analyst Christopher Danley, a "healthy beat" in the current quarter was offset by "slightly softer" guidance for the current quarter. Arm's softer guidance raised fears of an AI infrastructure spending slowdown. While cheaper models like DeepSeek could drive down the cost of AI models and, in turn, benefit demand for smartphones and PCs, that cost-efficiency could mean cloud providers spend less money buying AI chips for data centers. Nvidia's (NVDA) Arm-based Grace CPUs are used in its latest servers alongside its Blackwell AI chips. At the same time, Qualcomm's outlook on revenue from its chips for smartphones showed growth in that segment slowing in the March period. The company's handset segment saw revenue in its fiscal first quarter that ended Dec. 31 grow 13% to a record $7.6 billion. CFO Akash Palkhiwala said that segment will grow 10% in the current quarter. 'On a sequential basis, the decline in QCT handset [smartphone] revenues is primarily driven by seasonality and shipments to Apple,' Palkhiwala said. Apple (AAPL) has shifted to developing in-house chips for its smartphones, rather than relying on Qualcomm. JPMorgan analyst Samik Chatterjee said the magnitude of Qualcomm's earnings beat for the December quarter was 'not enough to overwhelm investor concerns around extraneous factors,' such as Apple's pivot and the expiration of its deal last year with Chinese smartphone maker Huawei. Wall Street analysts said an AI-driven demand cycle for smartphones could boost the companies amid their softer outlooks. 'The advent of lower-cost AI models like DeepSeek are expected to accelerate the spread of inferencing at the edge, through PCs, smartphones & IoT devices,' wrote Jefferies analyst Janardan Menon in a Thursday note. 'AI-based applications are being developed for these devices faster, including industry-specific AI models that can be deployed locally for low latency and security.' 'We expect this trend to benefit Arm both from rising demand for more powerful v9 cores [a powerful processing unit used within semiconductors], and increased demand for these devices themselves, most of which are expected to be Arm-based,' he added. In other words, AI for smartphones is coming, and that could drive demand, in turn boosting business for Arm, which sells licenses for its computing chip designs. Speaking about Qualcomm, Citi's Christopher Danley was more skeptical of an impending AI-driven demand wave for smartphones. 'While the handset market appears decent, we believe a handset upgrade cycle is at least a year away given a lack of a 'killer app.' We have historically upgraded QCOM during a handset upgrade cycle, but we don't believe one is imminent," he said. Despite Arm's dip Thursday, shares are still up nearly 130% from this time last year. Qualcomm is up a much more modest 17% from the prior year. Arm stands to benefit from the recently announced Stargate project. Arm was named a key technology partner in the massive AI infrastructure project backed by its parent company SoftBank (SFTBY), along with Oracle (ORCL) and OpenAI. The three said the project will invest $500 billion over four years. And while fears of an AI spending slowdown persist, Big Tech is still spending big on AI infrastructure. Microsoft (MSFT), Meta (META), and Google (GOOG) together are set to spend nearly $230 billion in capital expenditures driven by AI in 2025. Laura Bratton is a reporter for Yahoo Finance. Follow her on Bluesky @ Email her at
Yahoo
28-01-2025
- Business
- Yahoo
Nvidia stock begins recovery after DeepSeek AI frenzy prompted near $600 billion loss
Nvidia (NVDA) stock rose nearly 9% Tuesday as the AI chipmaker began to recover from a massive decline the prior day that shaved nearly $600 billion off its market cap. Nvidia's 17% freefall Monday was prompted by investor anxieties related to a new, cost-effective artificial intelligence model from the Chinese startup DeepSeek. Some Wall Street analysts worried that the cheaper costs DeepSeek claimed to have spent training its latest AI models, due in part to using fewer AI chips, meant US firms were overspending on artificial intelligence infrastructure. That created a concern among the investment community that Nvidia's high GPU (graphics processing unit, or AI chip) prices could come under pressure and that demand for semiconductors could wane. Nvidia's $589 billion market cap decline was the largest single-day loss in stock market history. The DeepSeek announcements drove down not only Nvidia but the market at large, with the tech-heavy Nasdaq (^IXIC) dropping 3%. Chip stocks dropped across the board Monday, but some names began to recover. After dropping more than 17% to start the week, Broadcom (AVGO) rose 2.6% Tuesday. Nvidia itself didn't express much anxiety over the DeepSeek buzz, calling R1 "an excellent AI advancement" in a statement Monday. Wall Street analysts continued to reflect on the DeepSeek-fueled market rout Tuesday, expressing skepticism over DeepSeek's reportedly low costs to train its AI models and the implications for AI stocks. JPMorgan analyst Harlan Sur and Citi analyst Christopher Danley said in separate notes to investors that because DeepSeek used a process called 'distillation' — in other words, it relied on Meta's (META) open-source Llama AI model to develop its model — the low spending cited by the Chinese startup (under $6 billion to train its recent V3 model) did not fully encompass its costs. 'We believe it is crucial to validate these costs before drawing conclusions,' Sur wrote. Danley added: 'Given Deepseek is based on leveraging cloud service providers [Meta] and AI is still in its infancy, we lean towards the argument of continued strong growth in AI spending.' Even so, DeepSeek 'clearly doesn't have access to as much compute as US hyperscalers and somehow managed to develop a model that appears highly competitive,' Raymond James analyst Srini Pajjuri wrote in a note to investors Monday. Laura Bratton is a reporter for Yahoo Finance. Follow her on Bluesky @ Email her at Sign in to access your portfolio
Yahoo
28-01-2025
- Business
- Yahoo
Nvidia stock tries to recover after DeepSeek AI frenzy prompted near $600 billion loss
Nvidia (NVDA) stock rose as much as 2.6% premarket Tuesday as the AI chipmaker began to recover from a massive decline the prior day that shaved nearly $600 billion off its market cap. Shares of the chipmaker later pared gains, up less than a percentage point after the market open. Nvidia's 17% freefall Monday was prompted by investor anxieties related to a new, cost-effective AI model from the Chinese startup DeepSeek. Some Wall Street analysts worried that the cheaper costs DeepSeek claimed to have spent training its latest AI models, due in part to using fewer AI chips, meant US firms were overspending on artificial intelligence infrastructure. That created a concern among the investment community that Nvidia's high GPU (graphics processing unit, or AI chip) prices could come under pressure and that demand for semiconductors could wane. Nvidia's $589 billion market cap decline was the largest single-day loss in stock market history. The DeepSeek announcements drove down not only Nvidia but the market at large, with the tech-heavy Nasdaq dropping 3%. Chip stocks dropped across the board Monday, but some names began to recover Tuesday morning. After dropping more than 17% to start the week, Broadcom (AVGO) rose as much as 3% premarket Tuesday and was up half a percentage point after the market open. Nvidia itself didn't express much anxiety over the DeepSeek buzz, calling R1 "an excellent AI advancement" in a statement Monday. Wall Street analysts continued to reflect on the DeepSeek-fueled market rout Tuesday, expressing skepticism over DeepSeek's reportedly low costs to train its AI models and the implications for AI stocks. JPMorgan (JPM) analyst Harlan Sur and Citi (C) analyst Christopher Danley said in separate notes to investors that because DeepSeek used a process called 'distillation' — in other words, it relied on Meta's open source AI model Llama to develop its model — the low spending cited by the Chinese startup (under $6 billion to train its recent V3 model) did not fully encompass its costs. 'We believe it is crucial to validate these costs before drawing conclusions,' wrote Sur. Danley added: 'Given Deepseek is based on leveraging cloud service providers [Meta] and AI is still in its infancy, we lean towards the argument of continued strong growth in AI spending.' Even so, DeepSeek 'clearly doesn't have access to as much compute as US hyperscalers and somehow managed to develop a model that appears highly competitive,' Raymond James analyst Srini Pajjuri wrote in a note to investors Monday. Laura Bratton is a reporter for Yahoo Finance. Follow her on Bluesky @ Email her at
