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Bram and marll two companies that deal in AI A6 Solutions are reporting earnings this week so we're going to take a closer look at maybe some of the things the market is expecting more importantly at the end of this episode we're also going to take a closer look at some recent rumors impacting Nvidia and Kos capacity I'm going to say I don't believe these rumors are true and it's not something that I would be worried about but but I'm going to try to share as much as information as I know so let's take a closer look like always if you want to learn more about the semiconductor space make sure to first we're going to take a closer look at Brom earnings and Brock are right now sitting at a market cap of $934 billion since kind of it's 6mon High the stock is down roughly 20% but still in the past 6 month the stock is up over 30% now broadcom is reporting earnings on Thursday after the market closes now for those that are not familiar broadcom helps AI players or kind of big Tech players design their own AI chips one of their biggest customers is Google with the tpus now in forms of expectations the market is expecting about 14.6 billion in Revenue Revenue up 22% year over year and it is expecting about a151 in earnings per share up roughly 37% now for Brom the huge growth opportunity and excitement is happening with its AI accelerators which is also known as xus and they believe this opportunity in AI will last over the next few years particularly with their hypers skill customers now broadcom expects the AI servable addressable market for xbus xpu and networking to reach between 60 to 90 billion by fiscal year end of 2027 and the growth is driven by the deployment of 1 million xpu clusters across a single fabric by each of their three hypers scale customers so there's definitely banking on the AI market so obviously one of the fears that is impacting Brom could be kind of like the Deep seek issue what happens if and we've kind of heard from other players that the Deep seek issue is not really an issue in capacity but still I feel that the market is always worried now with these worries we do kind of see that maybe that could be creating some valuation compressions and some kind of volatility in the stock bra comes forward which is the end of this fiscal year remember they are about to report quarter one so they still have pretty much a whole year ahead for this and that would be roughly 3141 which is not that crazy expensive forward one year is 2626 now we're going to see in a bit that nvidia's valuations are a lot cheaper um both forward I believe and forward way near for sure so personally I am more of an Nvidia I would prefer Nvidia over barcom right now but there's definitely that growth opportunity of more Tech players becoming uh a big market for Brom now in fiscal 2024 brom's AI Revenue was roughly 12.2 billion and they do expect this to ramp up significantly although not linearly and I feel like this could create some kind of um hiccups to the stock price because it is something that's quarterly Vari has it's variable within every quarter so while the market might be expecting AI Revenue to increase every single quarter there might be some quarters that might be weak all depending on orders uh so let's say Google for example maybe delay some of their TPU orders you might see some weakness in revenue and the stock price could react negative to that but the company is also advancement advancing in kind of deployment of new hyperscalers for next generational AI xus which could further expand that so serval addressable Market before 2027 now for quarter one of 2025 AI revenue is expected to grow by 65% year onye to $3.8 billion we can see the huge difference of this number with idious number right $3.8 billion on a quarter overall it is still growing at a nice 65% year-over-year basis now I do want to mention one thing that maybe broadcom and marll investors should know is during and videos most recent earnings they did talk a little bit about the ASC market and and Jensen said that I will say this just because the chip is designed doesn't mean it gets deployed and you've seen this over and over again there are a lot of chips that get built but when the time comes to a business decision has to be made and that business decision is about deploying a new engine a new processor into a limited AI Factory in size in power and in time and our technology is not only more advanced more performant it has much much better software capability and very importantly our ability to deploy is lightning fast so it's something to be mindful when really being bullish in the as6 space as Nvidia says that when it comes to business decision obviously they're going to say it but there is the best option now the final thing I think Nvidia investors I mean brockham investors should be familiar with is brockham has been actively managing its debt with plans to reduce interest expense by paying down term loans the company ended fiscal 2024 with roughly $70 billion in Gross principal debt and 10 roughly 9 billion in in cash um this was mainly because of the VMware acquisition but regardless this is definitely pretty leveraged at the moment and something to be worried about especially if maybe you might see a downturn in the future so something to keep in mind of now there is one more thing that I didn't save but we can see that bite Dan custom chips made by broadcom has been cancelled and broadcom to lose roughly two2 to3 billion so because of export restrictions this is kind of creating some pressure for Brock as well I'm going to guess we're going to hear more about this during the earning call but this could also create some volatility for the stock now let's move on to marll so marll is expected to report earnings on Tuesday I believe let's just double check on Wednesday after the market closes now Marvel's expected to see revenue of roughly $1.8 billion up about 26% year-over-year now Marvel and forward PE ratio is about 32 and forward one year is roughly 24.7 7 now some of the great things that Marvel investors should be expecting is they do have this huge agreement to build custom chips for AWS AKA Amazon's clouding business now Amazon has recently mentioned that they're going to increase the amount of as6 solutions so this could be a huge Revenue driver uh Marvel is kind of trying to capture the AI Market their overall goal is to achieve 20% market share in the custom silicon segment of AI data center which represents a $40 billion opportunity right now for this fiscal year they expect to have roughly $1.5 billion do which ends this quarter because they are about to report the quarter of 2025 so I don't think that's I I think that's going to be doable for them and for the next fiscal year they're going to expect roughly $2.5 billion um in AI Revenue so again we can see that all these companies are definitely growing at strong levels but it's not the type of numbers that you might see am Nvidia doing these are actually kind of numbers that AMD is doing so I I I think AMD and these players should be more comparable in the AI Revenue side um so I I I want to say if I was to choose which one I would be more bullish on right now I think marll just because it is a smaller player and because it is a smaller player I do believe it has a little bit more growth opportunity especially if Amazon's AWS trinium 2 chips continue to grow dramatically now the final topic I want to discuss is NVIDIA and Nidia we can see 27 forward PE ratio 2.89 forward Wier which is next Fisco year right so a lot cheaper than some of these other players um in in both numbers now Nvidia stock right now is down roughly 16% uh from its six-month high and one of the issues is there are rumors that Nvidia has cut its coas capacity orders from tsmc and these are rumors we are seeing very often now I want to say colos orders are ones that we really can't verify just with with news like this um and that's the tricky thing about Nvidia right there are a lot of reports with things happening in the supply chain that one can't vary much verified and that creates a lot of volatility in the stock now we have our report from tsmc's earnings that they are can't keep up with coas capacity and we have heard from Nvidia that there's still strong demand from um from for the Blackwell which uses this coas Advanced packaging solution now there could be some other reasons if these are true I couldn't believe that they're not true and I wouldn't be worried for NVIDIA investors but there are some reasons to consider first I believe one of those reasons could be hbm yield constraints the hbn market is a key component in gpus and if manufacturing and yields are lower than expected this could create a bottleneck where even if GPU demand remains High because you have less hbm you might not need as much Advanced packaging Solutions as you previously intended the other thing is there could be improvements in K Shields and if you see improvements in kaas yelds you're going to be able to produce more chips and you don't need kind of that extra capacity that you had kind of allocated because the yields were much lower before unfortunately there um also there could be some relocation of resources and Didia could be shifting towards maybe new packaging Technologies or new Solutions outside of coas which I don't think it's the case here um then the only other thing is kind of that negative issue or that bearish case where maybe demand is Shifting but again if you want to follow what these companies have said in recent earnings from tsmc from Nvidia that doesn't seem to be the case so I again I don't think the rumors are true but if it is I think it's most likely something to do with the hbm side or with maybe kaas yields improving compared to what they previously were expected or maybe a mixture of both uh regardless we have heard great demand for Blackwell and we've also heard kind of great thoughts um that the overall supply for coas package in and advanced packaging from tsmc is still Supply limited and not demand limited so those are the topics I wanted to discuss I hope you guys enjoy it
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