Is META or AVGO a better buy?

Welcome to AI Collision 💥,

In today’s collision between AI and our world:

Galaxy Invaders 10,000
Zuck says this about DeepSeek
AVGO or META? Who wins?

If that’s enough to get the hundreds of billions flowing, read on…

AI Collision 💥

I’ve been going through the process of unpacking a lot of boxes after recently moving house.

The other day I got to a box that was about 1,000 Xmases all rolled into one.

In it was my click wheel iPod from 2004 (yes, it still works – thanks to some upgrades from me), my Sharp MD-MS722 portable MiniDisc player, several generations of smartphones from a Samsung S7 Edge to an iPhone 9, a Nintendo Entertainment System, a Super Nintendo Entertainment System, a PS4 Pro and one of my most prized possessions, a (also still working) Galaxy Invader 10,000 hand-held space game.

I promise I’m not a hoarder. I just love collecting old tech. OK, so maybe I’m an old-tech hoarder… 🤔

Point being, I do love to look back at some of this stuff because it gives perspective on where we are today.

We’re at the brink of humanoid robots in the home, fully self-driving cars shuttling us around and gigantic rockets being caught with chopsticks. Just the other day a prototype plane built with the vision of bringing supersonic plane travel back to consumers, broke the sound barrier for the first time.

We are advancing at great speed – and a fundamental part of that advancement is AI. There’s also a decent argument to be made that 2025 is going to see the most rapid and mind-blowing advancements we’ve ever seen in technology.

The equivalent pace would be more like Samsung and Apple releasing new Galaxy and iPhones every month, not every year (or so).

But just how fast is this coming?

Well here’s what the CEO (and founder) of Meta, Mark Zuckerberg, said on the company’s latest earnings call:

This is going to be a really big year. I know it always feels like every year is a big year, but more than usual, it feels like the trajectory for most of our long-term initiatives is going to be a lot clearer by the end of this year. So, I keep telling our teams that this is going to be intense because we have about 48 weeks to get on the trajectory that we want to be on. In AI, I expect that this is going to be the year when a highly intelligent and personalized AI assistant reaches more than 1 billion people, and I expect Meta AI to be that leading AI assistant.

One billion people is a lot. That is a big leap in use and adoption. Unless it’s pushed out without the need to buy a new device. After all, Meta isn’t doing devices at scale (yet, although I still think it will “win” AI with its smart glasses) but it is deep into the development of its Llama AI application.

Of course, behind Llama sits an untold amount of AI infrastructure. How much? Here’s Zuck had to say:

These are all big investments, especially the hundreds of billions of dollars that we will invest to AI infrastructure over the long term. I announced last week that we expect to bring online almost a gigawatt of capacity this year. And we’re building a two-gigawatt and potentially bigger AI data center that is so big that it will cover a significant part of Manhattan if we were placed there. We’re planning to fund all of this by, at the same time, investing aggressively in initiatives that use these AI advances to increase revenue growth.

It was a very good earnings call. Particularly around how the company plans to aggressively use its investments in AI so far to increase the revenues to invest more into its AI build out.

He also talks about DeepSeek and learning from that. It’s also already pushing away from “prelearning” towards “inference”. This basically means it’s not trying to get the AI to learn as much, it’s trying to get it to actively reason, predict and think in better ways.

It also means nothing that happened this week is going to slow down Meta. It’s taken a decisively progressive approach (and financial bet) on AI. I think it’s a winning play, and it will also drag along other companies helping to build that out with them.

One of those being Broadcom. Meta develops its own “custom” silicon, the MTIA (Meta Training and Inference Accelerator). But it’s widely accepted this was developed in tandem with Broadcom, who is a key supplier of ASIC hardware (chips specifically good at a limited number of things, like processing).

Without getting into the weeds too much, after Meta smashed the earnings this quarter, and then after Zuckerberg and his team spoke about their expectation to “further ramp adoption of MTIA”, Broadcom went and popped 4.5% higher in after-hours trading.

This is how the AI market works. The big spenders outline their plans to build more, expand more, adopt and ramp up more of their AI infrastructure, then companies that actually help to provide that infrastructure shoot higher off the back of it.

Simple right?

Except for when China drops a fear-bomb on the market. But that’s overblown, as we know. From here, I think for both Meta and Broadcom the next move is up and higher.

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Boomers & Busters 💰

AI and AI-related stocks moving and shaking up the markets this week. (All performance data below over the rolling week).

man in black suit jacket and black pants figurine

Boom 📈

Lantern Pharma (NASDAQ:LTRN) up 15%
Amesite (NASDAQ:AMST) up 13%
Predictive Oncology (NASDAQ:POAI) up 8%

Bust 📉

Vertiv (NYSE:VRT) down 25%
Nvidia (NASDAQ:NVDA) down 15%
Micron (NASDAQ:MU) down 12%

From the hive mind 🧠

Great question! Who IS Liang Wenfeng?
Err, I’m pretty sure OpenAI was being accused of stealing data to train its models. And now it’s upset that someone is stealing from them? If it’s all open source, imagine the real speed at which things would develop in AI!
Meta beats, and Microsoft disappoints…