It was a big year for silicon in Silicon Valley, but brutal for the company most responsible for the area’s moniker. Intel, the 56-year-old chipmaker co-founded by Gordon Moore and Robert Noyce and legendary investor Arthur Rock, had its worst year since going public in 1971, losing 61% of its value.
On the other hand, Broadcom, the chip conglomerate run by CEO Hock Tan and headquartered in Palo Alto, California, had a remarkable year. Its stock price soared 111% in 2024, its best performance ever. The company is the product of a 2015 acquisition by Avago, which went public in 2009.
The diverging fortunes of the two companies were driven by artificial intelligence. Broadcom rode the AI train, while Intel largely missed it. The changing fortunes of the two chipmakers underscores the fleeting nature of leadership in the tech industry and how a few key decisions can result in hundreds of billions – or even trillions – of dollars in market cap shifts.
Broadcom develops custom chips for Google and other huge cloud companies. It also makes essential networking gear that large server clusters need to tie thousands of AI chips together. Within AI, Broadcom has largely been overshadowed by Nvidia, whose graphics processing units (GPUs) power most of the large language models being developed at OpenAI, Microsoft, Google, and Amazon, and also enable the heftiest AI workloads. Despite being overshadowed, Broadcom’s accelerator chips, which the company calls XPUs, have become a key piece of the AI ecosystem.
On the other hand, Intel, which for decades was the dominant U.S. chipmaker, has been mostly shut out of AI. Its server chips lag far behind Nvidia’s, and the company has also lost market share to longtime rival Advanced Micro Devices (AMD) while spending heavily on new factories. Intel’s board ousted Pat Gelsinger from the CEO role on December 1, after a tumultuous four-year tenure. “I think someone more innovative might have seen the AI wave coming,” said Paul Argenti, professor of management at Dartmouth’s Tuck School of Business.
Broadcom is now worth about $1.1 trillion and is the eighth U.S. tech company to cross the trillion-dollar mark. It is the second most valuable chip company, behind Nvidia, which has driven the AI boom to a $3.4 trillion valuation, trailing only Apple among all public companies. Nvidia’s stock price soared 178% this year, but actually did better in 2023, when it gained 239%. Until four years ago, Intel was the world’s most valuable chipmaker, nearing a $300 billion market cap in early 2020. The company is now worth about $85 billion, has been removed from the Dow Jones Industrial Average – replaced by Nvidia – and has been in talks to sell off parts of its business. Intel now ranks 15th in market cap among semiconductor companies globally.
