CLSA's Bhavtosh Vajpayee said the AI semiconductor cycle will not peak in 2028, calling that expectation "utterly wrong" and projecting the current chip shortage will persist until roughly 2030. Speaking to CNBC on Wednesday, Vajpayee said demand for GPUs and custom AI chips currently exceeds supply by about 73%, and he expects upstream semiconductor and hardware companies to benefit as the shortage worsens alongside expanding AI infrastructure spending. He also noted that large semiconductor companies trade at lower valuation multiples than many other parts of the AI ecosystem. Vajpayee highlighted Meta's Muse as a notable recent development for making AI agent creation easier through simple language commands, and said similar advances should emerge in China, where companies including Alibaba are developing smaller AI models. He pointed to Apple as particularly important because smartphones already sit at the center of consumers' daily lives and could become the primary gateway for accessing AI services, while CLSA sees clearer opportunities in AI hardware suppliers than among model developers, where he said it remains too early to determine the eventual winners.
Broadcom Sets $230 Billion AI Revenue Target for Fiscal 2028
Broadcom expects AI chip revenue of roughly $115 billion in fiscal 2027 and $230 billion in fiscal 2028, according to Reuters, a target that doubles the delivery test for the custom AI chip and networking supplier. The company reported $16.7 billion in fiscal third-quarter AI semiconductor revenue, about 56% of its $29.59 billion total. Shares fell about 2% to $348.02 at 10.40am ET on Thursday morning as investors weighed the promise against execution risk. At that price, Broadcom trades 15.36% below the $411.18 GF Value cited by GuruFocus. Doubling AI sales in a year demands that chips be made, packaged and delivered on schedule, and any slip in supply or customer deployments would leave the revenue target offering little comfort.
Meta Bets Future on Muse AI Agent as It Tops App Stores
Meta is banking its future on its new Muse AI agent, which CEO Mark Zuckerberg unveiled as the centerpiece of the company's vision at the Meta Connect conference on Wednesday. The agent has quickly jumped to the top of both Apple's App Store and Google's Play Store, and according to Zuckerberg, millions of people are already using it. Chief AI officer Alexandr Wang demonstrated use cases ranging from scheduling meetings to negotiating better cable rates and making purchases across multiple services, and Meta is also bringing Muse to its next-generation Meta VR Glasses and to the Muse Charm, a handheld device that lets users interact with the agent without a smartphone or smart glasses. Meta said it will make money from Muse by taking a small cut on transactions made via the agent, and Zuckerberg said he expects Muse to grow into the personal super intelligence that billions of people around the world will use. The company dedicated part of the keynote to privacy, citing the Muse Secure VM and a forthcoming Muse Confidential VM, though it may take time to earn trust after its $5 billion settlement over the Cambridge Analytica data privacy scandal in 2019.
Nebius Shares Jump 8% as BNP Paribas Exane Lifts Target to $399
Nebius Group shares climbed about 8% Thursday after BNP Paribas Exane upgraded the AI infrastructure provider to Outperform from Neutral and raised its price target to $399 from $260. Exane BNP Paribas analyst Stefan Slowinski lifted the target on Thursday, according to TipRanks data, while other analysts' recent targets span from $84 to $410. The upgrade comes as Nebius prepares another round of pricing changes for its AI cloud services: starting Oct. 1, prices for selected Nvidia GPU instances are set to increase by roughly 17% to 21%, and rates for some AMD EPYC Genoa CPU services are expected to rise about 25%, following another price increase earlier this year. The pricing moves come amid continued demand for computing capacity used to train and run AI models, and Nebius has also signed several large customer agreements while its AI cloud business posted rapid growth in the latest quarter.
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