Broadcom (AVGO) Stock Jumps on Launch of First 128G Fibre Channel Platforms

TLDR

• Broadcom launched the Brocade X8 Directors and Brocade G820 56-port switch, marking the industry’s first 128G Fibre Channel platforms built for AI workloads.
• The new Gen 8 platforms include quantum-resistant 256-bit encryption and post-quantum cryptography to protect against future quantum computing threats.
• Brocade X8 Directors support up to 384 ports at 128G, while the G820 switch offers 56 128G SFP+ ports in a compact 1U design.
• Both products are available now, with OEM partners including Dell, HPE, IBM, Lenovo, and NetApp set to ship the technology in coming quarters.
• Broadcom stock climbed 2.8% on Wednesday, also benefiting from investor optimism ahead of Nvidia’s quarterly earnings report.

Broadcom announced Wednesday the release of two new data center products designed to handle the growing demands of artificial intelligence workloads. The Brocade X8 Directors and Brocade G820 56-port switch represent the first 128G Fibre Channel platforms available in the industry.

Broadcom Inc., AVGO

The semiconductor company’s new Gen 8 Fibre Channel portfolio addresses both performance and security needs. Each platform features quantum-resistant 256-bit encryption and post-quantum cryptography algorithms. These security measures aim to protect data from threats posed by future quantum computers.

Dennis Makishima, vice president and general manager of Brocade Storage Networking at Broadcom, stated the platforms establish a foundation for mission-critical and enterprise AI workloads. The company emphasized the products’ ability to handle data-intensive applications.

The Brocade X8 Directors can support up to 384 ports running at 128G speeds. The Brocade G820 switch provides 56 128G SFP+ ports in a space-efficient 1U form factor. Both products incorporate embedded SAN AI technology for automated infrastructure management.

The platforms also feature AI-powered autonomy that adapts to changing network environments. SAN Fabric Intelligence provides end-to-end visibility across the storage network. An Adaptive Traffic Optimizer handles dynamic load balancing to optimize performance.

Industry Partners Back the Launch

Multiple technology companies have committed to shipping the new platforms. Dell Technologies, H3C, Hitachi Vantara, HPE, IBM, Lenovo, NetApp, and TG Stor all provided support statements for the launch.

Both products are available for purchase starting immediately. OEM partners plan to begin shipping the technology to customers over the next several quarters.

Stock Performance and Market Context

Broadcom shares rose 2.8% by Wednesday afternoon, reaching as high as 5.6% earlier in the trading session. The stock movement came on the same day as the product announcement.

Investor sentiment also received a boost from anticipation surrounding Nvidia’s third-quarter earnings report. Nvidia stock gained 1.9% during the same trading period. The two companies maintain a close relationship in the AI infrastructure space.

Broadcom provides connectivity chips and services that enable multiple processors to work together in server environments. Nvidia supplies the GPU hardware that powers advanced data centers. Strong performance from Nvidia often translates to positive momentum for Broadcom stock.

The company holds a market capitalization of $1.61 trillion. Broadcom reported revenue growth of 28.01% to $59.93 billion in the last twelve months. The company maintains gross profit margins of 77.19%.

Analysts have recently increased their price targets for Broadcom. Jefferies raised its target to $480, citing growth potential in the company’s ASIC business. Mizuho set a target of $435 following a deal with Anthropic expected to generate $10 billion in revenue. Evercore ISI adjusted its target to $403 after Broadcom announced a deal with OpenAI.

Broadcom recently launched the Thor Ultra, the industry’s first 800G AI Ethernet Network Interface Card. The product aims to improve connectivity for large-scale AI workloads. OEM partners are expected to begin shipping the new 128G Fibre Channel platforms in coming quarters.

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