Broadcom (AVGO) is taking a different approach to challenge Nvidia's dominance in artificial intelligence infrastructure. Rather than designing a competing GPU, the chipmaker is targeting the networking layer that connects thousands of accelerators into a single computing system.
On July 1, networking company DriveNets unveiled two AI-networking platforms built around Broadcom's Tomahawk 6 switch chip. The 2600SL and 2601S systems each deliver 102.4 terabits per second of switching capacity across 64 ports running at 1.6 Tbps. The liquid-cooled and air-cooled platforms are scheduled to begin shipping in the third quarter of 2026.
The systems promise faster connections with fewer networking layers, potentially reducing latency, power consumption, and spending on optical equipment. For Broadcom investors, the attraction is straightforward: the company can capture more AI-infrastructure spending without needing to defeat Nvidia in GPUs.
How Tomahawk 6 Addresses AI Networking Bottlenecks
Training advanced AI models requires enormous numbers of accelerators to exchange data quickly. A network bottleneck can leave costly GPUs and custom processors idle, reducing the return on a data center's investment. Broadcom says Tomahawk 6 can connect as many as 128,000 accelerators through only two switching tiers.
Bob Wheeler, an analyst at LightCounting, noted in Broadcom's March product announcement that using fewer tiers can reduce latency, simplify congestion control, and cut the number of optical links required. The DriveNets launch marks a commercial step forward for the chip, which began shipping in production volumes in March, less than three quarters after sampling began.
Dell'Oro Group vice president Sameh Boujelbene said in Broadcom's March announcement that the company was "translating its roadmap into real-world deployment" by moving Tomahawk 6 into production shipments.
Broadcom Benefits Even When Customers Stick with Nvidia
The more contrarian investment argument is that Broadcom can benefit even when customers continue buying Nvidia processors. Nvidia's advantage extends well beyond GPUs. Its NVLink, InfiniBand, and Spectrum-X Ethernet products allow the company to control more of the system linking accelerators together. That integrated approach can deliver strong performance, but it also makes customers more dependent on Nvidia's hardware and software ecosystem.
Broadcom is attacking that control through Ethernet. Tomahawk switches can support networks containing Nvidia GPUs, Google TPUs, and other custom accelerators. That gives cloud operators greater freedom to combine products from several suppliers rather than buying an entirely proprietary system.
The broader market is already moving toward Ethernet. Dell'Oro said sales of Ethernet switches used in AI back-end networks more than doubled during the first quarter of 2026 and represented about two-thirds of switch sales in AI clusters. Boujelbene said Ethernet maintained a "clear lead" despite a recovery in InfiniBand demand.
Analyst Outlook: Strong Growth Ahead for Broadcom's AI Networking
JPMorgan analyst Harlan Sur expects Broadcom to retain about 70% of the AI Ethernet switching-silicon market, citing its rapid product cycle and the technical barriers facing competitors. Sur estimates Broadcom's AI-networking revenue could more than double to at least $45 billion in fiscal 2027.
Mizuho analyst Vijay Rakesh has also identified scale-up Ethernet as a potential growth engine. MarketWatch reported that he believes it could eventually contribute about one-quarter of Broadcom's networking revenue and help the company compete with NVLink. Mizuho raised its Broadcom price target to $530 from $480 following the June earnings report while retaining an Outperform rating.
For context, Broadcom stock has pulled back about 20% from its peak, as discussed in our article Broadcom Stock Down 20% from Peak: Can AI Deals Drive a Record Retest?. Meanwhile, Nvidia's AI chip dominance faces growing threats from startups and big tech rivals, as covered in Nvidia's AI Chip Dominance Faces Growing Threat from Startups and Big Tech Rivals.
This article is for informational purposes only and does not constitute financial advice.
