Source: Semiconductor Industry Watch. At yesterday's Conputex conference, Dr. Lisa Su released the latest roadmap. Afterwards, foreign media morethanmoore released the content of Lisa Su's post-conference interview, which we have translated and summarized as follows: Q: How does AI help you personally in your work? A: AI affects everyone's life. Personally, I am a loyal user of GPT and Co-Pilot. I am very interested in the AI used internally by AMD. We often talk about customer AI, but we also prioritize AI because it can make our company better. For example, making better and faster chips, we hope to integrate AI into the development process, as well as marketing, sales, human resources and all other fields. AI will be ubiquitous. Q: NVIDIA has explicitly stated to investors that it plans to shorten the development cycle to once a year, and now AMD also plans to do so. How and why do you do this? A: This is what we see in the market. AI is our company's top priority. We fully utilize the development capabilities of the entire company and increase investment. There are new changes every year, as the market needs updated products and more features. The product portfolio can solve various workloads. Not all customers will use all products, but there will be a new trend every year, and it will be the most competitive. This involves investment, ensuring that hardware/software systems are part of it, and we are committed to making it (AI) our biggest strategic opportunity. Q: The number of TOPs in PC World - Strix Point (Ryzen AI 300) has increased significantly. TOPs cost money. How do you compare TOPs to CPU/GPU? A: Nothing is free! Especially in designs where power and cost are limited. What we see is that AI will be ubiquitous. Currently, CoPilot+ PC and Strix have more than 50 TOPs and will start at the top of the stack. But it (AI) will run through our entire product stack. At the high-end, we will expand TOPs because we believe that the more local TOPs, the stronger the AIPC function, and putting it on the chip will increase its value and help unload part of the computing from the cloud. Q: Last week, you said that AMD will produce 3nm chips using GAA. Samsung foundry is the only one that produces 3nm GAA. Will AMD choose Samsung foundry for this? A: Refer to last week's keynote address at imec. What we talked about is that AMD will always use the most advanced technology. We will use 3nm. We will use 2nm. We did not mention the supplier of 3nm or GAA. Our cooperation with TSMC is currently very strong-we talked about the 3nm products we are currently developing. Q: Regarding sustainability issues. AI means more power consumption. As a chip supplier, is it possible to optimize the power consumption of devices that use AI? A: For everything we do, especially for AI, energy efficiency is as important as performance. We are studying how to improve energy efficiency in every generation of products in the future-we have said that we will improve energy efficiency by 30 times between 2020 and 2025, and we are expected to exceed this goal. Our current goal is to increase energy efficiency by 100 times in the next 4-5 years. So yes, we can focus on energy efficiency, and we must focus on energy efficiency because it will become a limiting factor for future computing. Q: We had CPUs before, then GPUs, now we have NPUs. First, how do you see the scalability of NPUs? Second, what is the next big chip? Neuromorphic chip? A: You need the right engine for each workload. CPUs are very suitable for traditional workloads. GPUs are very suitable for gaming and graphics tasks. NPUs help achieve AI-specific acceleration. As we move forward and research specific new acceleration technologies, we will see some of these technologies evolve-but ultimately it is driven by applications. Q: You initially broke Intel's status quo by increasing the number of cores. But the number of cores of your generations of products (in the consumer aspect) has reached its peak. Is this enough for consumers and the gaming market? Or should we expect an increase in the number of cores in the future? A: I think our strategy is to continuously improve performance. Especially for games, game software developers do not always use all cores. We have no reason not to adopt more than 16 cores. The key is that our development speed allows software developers to and can actually utilize these cores. Q: Regarding desktops, do you think more efficient NPU accelerators are needed? A: We see that NPUs have an impact on desktops. We have been evaluating product segments that can use this function. You will see desktop products with NPUs in the future to expand our product portfolio.

Almost unnoticed, a tech giant you may have never heard of is emerging.$Tesla (TSLA.US)$Squeezing into the heavily promoted list of the seven major tech companies. Can Tesla maintain this position?

The overlooked seventh major tech company is$Broadcom (AVGO.US)$, a tech company that produces both hardware and software. Well-known in the world of information technology, but not so much outside of it. The seven major tech companies were envisioned in early 2023 as a group of stocks, the most valuable US tech companies by market cap. In descending order, they include Apple (recent market cap: $3.4 trillion), $Microsoft (MSFT.US)$N/A.$NVIDIA (NVDA.US)$Alphabet$Amazon (AMZN.US)$Please use your Futubull account to access the feature.$Meta Platforms (META.US)$ And Tesla (current market cap: $768 billion).

However, Broadcom's market cap exceeded Tesla's last spring and has been ahead of the electric car manufacturer for most of this year. Its market cap is currently around $803 billion.

Broadcom cannot guarantee to be ahead of Tesla in the short term. The volatility of Tesla's stock price is well known, and its market cap may exceed Broadcom's for a period of time. However, Broadcom's long-term prospects are more optimistic than the two. Wall Street analysts expect its stock price to continue to rise on average, while they expect Tesla's stock price to continue to fall. Tesla's stock price has fallen to levels seen nearly four years ago, while Broadcom's stock price has risen by 290% since then.

So, how did this little-known giant rise to the top of the tech industry? Mainly because of the combination of its technological and financial expertise. The company is the grandson of Hewlett-Packard, which in 1999 spun off a company called Agilent Technologies, who then in 2005 spun off a company named Avago to two private equity firms. Avago started acquiring semiconductor companies, acquired a large company named Broadcom in 2015, and named itself after it.$HP Inc (HPQ.US)$HP Inc.$Agilent Technologies (A.US)$Agilent Technologies

Since that split, Broadcom's PE lineage has always guided it. Forrester analyst Naveen Chhabra said: "Broadcom's operations are very similar to PE companies, investing in assets that can bring quick returns." It is "very savvy in investing in companies that can sustain or increase revenue," while "it can transform companies into high-profit businesses."

Evidence A is Broadcom's largest acquisition, namely the cloud computing company VMware acquired last November. A report from Forrester warns VMware customers: "Don't be scared off by rising prices... in most cases, customers will find renewal quotes several times higher than what they previously paid."

Wall Street approves of Broadcom's reforms. "They seem to be beating VMware," said Bernstein analyst Stacy Rasgon. "VMware's performance this quarter has significantly exceeded expectations and seems poised for further growth."

Smart acquisitions and management are at the core of Broadcom's growth, but they do not fully explain the company's staggering market cap growth. Another key factor is the AI boom, which comes as no surprise. One of Broadcom's most important businesses is designing semiconductors - computer chips - the demand for which has been consistently high over the past year. According to a Bank of America securities report, Broadcom's AI chip sales for fiscal year 2023 totaled $4.2 billion. The company expects AI chip sales to soar to $12.1 billion this year, reaching $16.9 billion next year.

Broadcom's chip expertise combined with VMware's success has propelled Broadcom's market cap from slightly above McDonald's when OpenAI released ChatGPT in November 2022, to now being one of the seven giants.

A key factor in Broadcom's success and future is CEO Hock Tan, who was appointed as company manager when Avago was spun off in 2005. At 72 years old, born in Malaysia, he holds an engineering degree from MIT and an MBA from Harvard Business School. Most of his professional career has been in tech companies, but he has also held financial positions at Pepsico and General Motors - giving the company a shared expertise in both technology and finance. In recent years, Tan has been one of the highest-paid CEOs in the USA; last year his income was $0.162 billion. Succession is a clear concern for the company, with no successor identified yet. Tan has indicated he will continue to run the company for at least four more years.

Most Wall Street analysts are bullish on Broadcom. "The numbers might keep going up," said Bernstein's Rasgon. "And the valuation seems increasingly attractive." JPMorgan's Harlan Sur stated that the stock "remains our top pick in the semiconductor sector."

There are no limits, but currently, this company is basking in the sunshine. One thing is certain: Broadcom will no longer go unnoticed.

Will the market cap surpass $1 trillion?

Broadcom is now just one step away from achieving the brilliant $1 trillion market cap, as it only needs to increase by less than 30% to achieve this impressive feat. But can it do this by 2025? Let's find out.

Broadcom's job content is very rich, so it is difficult to summarize one by one. It provides customers with hardware and software solutions as well as chip design services across various industries. In terms of hardware, its network switches are highly regarded because these devices are crucial for building datacenters used for training AI models.

On the software side, Broadcom's products enable businesses to control their large computers, which is crucial in today's increasingly digital business environment. It also has network security software, but its largest software products come from acquisitions.

Last year, Broadcom acquired VMware, a company that allows users to establish virtual desktops in the cloud. This was a successful acquisition and a major reason for Broadcom's latest quarter revenue growth.

In the third quarter of the 2024 fiscal year (ending August 4), Broadcom's revenue increased by 47% year-on-year, reaching $13 billion. Although this sounds impressive, what happened behind the scenes is far less impressive. If we exclude the impact of acquiring VMware (which did not contribute to performance in the same period last year), revenue only increased by 4%. This is a significant change that completely alters investors' views on Broadcom.

But this does not mean that artificial intelligence has not helped Broadcom's business. CEO Hock Tan stated at Broadcom's third-quarter earnings call:

As you know, our large-scale customers continue to expand and scale their AI clusters. Custom AI accelerators have grown 3.5 times year-on-year. In terms of structure, Ethernet switches powered by Tomahawk 5 and Jericho3-AI have grown by over 4 times, while optical lasers and thin chips used for optical interconnects have grown by 3 times.

If you analyze it carefully, you will find this is an incredible growth. Connector switches have grown by 400%, while custom AI accelerators (such as Alphabet's Tensor Processing Units (TPU), which outperform Nvidia GPUs in AI performance) have grown by 350%!

Broadcom's these departments show strong performance; the issue is that they do not make up a large proportion of the company's business, so their impact is not significant. However, this situation may change next year.

Wall Street analysts expect Broadcom's revenue to increase by 17% in the 2025 fiscal year. This figure includes the full integration of VMware, accurately reflecting the real revenue growth situation. In addition, Earnings Per Share (EPS) is expected to increase from $4.82 this year to $6.17 next year, a 28% increase.

If investors can buy the stock at a reasonable price, then this seems like a company worth investing in. However, Broadcom's expected PE ratio of 35 times is a bit high.

Due to Nvidia's PE ratio of 41 times and faster growth rate, its valuation is at the same level. Therefore, investors must decide whether they need to look for the next Nvidia in Broadcom or whether they should continue to hold Nvidia, as its performance remains strong.

Regardless, Broadcom is still advancing towards a $1 trillion market cap. The average rating of 27 Wall Street analysts is a buy, with a prediction that the stock price will reach around $199 in a year. This is a 19% increase from today's price, but not enough to reach the 30% growth required for a $1 trillion market cap.

However, if Broadcom can achieve this level of stock performance, it may far exceed the market (measured by the S&P 500 index), which typically grows by about 10% annually, making Broadcom an excellent stock choice. If Broadcom grows by 20% next year, it won't be far from the $1 trillion mark, and if it can maintain its growth momentum, it is likely to achieve this goal in 2026.

With strong and growing demand for its AI products, Broadcom should remain strong in the coming years.

Editor/Rocky