Why Broadcom Stock Soared Today
Key Points
Alphabet's latest AI model is earning rave reviews.
Broadcom helps to produce Google's AI chips.
- 10 stocks we like better than Broadcom ›
Shares of Broadcom (NASDAQ: AVGO) rose more than 11% on Monday, as investors grew increasingly excited about the chipmaker's artificial intelligence (AI)-fueled expansion prospects.
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Gemini 3 has the goods
Broadcom's gains coincided with a surge in Alphabet's (NASDAQ: GOOGL)(NASDAQ: GOOG) stock price. Alphabet's shares have rallied in recent days, following the celebrated launch of Gemini 3.
The internet search titan's latest AI model features an array of impressive capabilities, including advanced reasoning that can better understand context with less prompting.
On Sunday, Salesforce CEO Marc Benioff highlighted Gemini 3's advantages over OpenAI's uber-popular ChatGPT in a post on X (formerly Twitter).
I've used ChatGPT every day for 3 years. Just spent 2 hours on Gemini 3. I'm not going back. The leap is insane -- reasoning, speed, images, video... everything is sharper and faster. It feels like the world just changed, again.
Alphabet's AI success should drive sales of Broadcom's chips
Gemini 3's accolades bode well for Broadcom. The semiconductor giant helps to produce Alphabet's custom-designed tensor processing units (TPUs).
TPUs accelerate AI workloads, such as training models. Alphabet uses TPUs for its own AI needs and makes them available to its cloud computing customers via Google Cloud.
Gemini 3's well-received launch could boost demand for TPUs, as well as Broadcom's other AI offerings.
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Joe Tenebruso has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Alphabet and Salesforce. The Motley Fool recommends Broadcom. The Motley Fool has a disclosure policy.
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