Obviously, nobody can predict the future with absolute certainty. Investors can, however, connect informational dots to create a probable picture.
To this end, a confluence of factors has set a very bullish stage for communications technology giant Broadcom (AVGO 2.66%).
Broadcom's place in the AI movement
Unlike Nvidia or Amazon, who pretty much are industry darlings in the artificial intelligence (AI) space, Broadcom hasn't been much in the AI limelight.
However, there's an issue of concern: AI driven data centers are hitting a wall. However, computer processing power isn't the problem; Nvidia's hardware is more than up to the task. The surprising bottleneck is the speed at which a rack of processors communicates with one another within a data center. AI platforms are creating and processing digital data faster than it can be disseminated.
Enter Broadcom, which makes the tech connecting an AI data center's many processors. Its recently introduced Brocade G710 24-port 64G switch, for instance, can handle speeds up to 64 gigabits, while the entire switch itself boasts bandwidth of up to 1.5 terabytes per second.
That may not mean much to a layperson, but for data center operators, that blazing-fast speed opens the door to new artificial intelligence functionality.
And that's just one item on Broadcom's tech menu. Hyperfast (200 gigabits per second) digital signal processors and a 51.2 terabytes-per-second fiberoptic Ethernet switching platform are also part of its lineup.
Here comes the rush
Data center interconnection technology is nothing new. However, it required the advent of artificial intelligence to highlight how little had been done of late to advance this interconnectivity tech. No other company is as well positioned as Broadcom to close this gap.
It's now starting to be closed in earnest though. As Broadcom CEO Hock Tan commented in December, the market for AI networking components could be worth $60 billion to $90 billion per year by 2027.
For the sake of comparison, while Broadcom enjoys a commanding lead of this market, it still only did a little over $12 billion worth of such business last year.
