Broadcom Partners with Google for Custom TPUs
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 1 hour ago
0mins
Should l Buy AVGO?
Source: stocktwits
- Long-Term Partnership: Broadcom has entered into a long-term partnership with Google to develop and supply custom Tensor Processing Units (TPUs), which is expected to enhance the performance of Google's future generations of TPUs, thereby strengthening its competitive edge in the AI sector.
- Supply Assurance Agreement: According to a filing with the U.S. Securities and Exchange Commission, Broadcom will supply networking and other components for Google's next-generation AI racks, ensuring supply assurance through 2031, which further solidifies the strategic collaboration between the two companies.
- Positive Market Reaction: Following the announcement, Broadcom's stock (AVGO) rose nearly 3% in after-hours trading, while Google's stock (GOOG) also saw a slight increase of about 0.19%, indicating market optimism regarding this partnership.
- Strategic Expansion: The existing strategic collaboration between Broadcom, Google, and Anthropic PBC has also been expanded, highlighting the potential for synergistic development in AI technology among the three parties, which may lead to broader market applications.
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Analyst Views on AVGO
Wall Street analysts forecast AVGO stock price to rise
30 Analyst Rating
29 Buy
1 Hold
0 Sell
Strong Buy
Current: 314.550
Low
370.00
Averages
457.75
High
525.00
Current: 314.550
Low
370.00
Averages
457.75
High
525.00
About AVGO
Broadcom Inc. is a global technology firm that designs, develops, and supplies a range of semiconductors, enterprise software and security solutions. The Company operates through two segments: semiconductor solutions and infrastructure software. Its semiconductor solutions segment includes all of its product lines and intellectual property (IP) licensing. It provides a variety of radio frequency semiconductor devices, wireless connectivity solutions, custom touch controllers, and inductive charging solutions for mobile applications. Its infrastructure software segment includes its private and hybrid cloud, application development and delivery, software-defined edge, application networking and security, mainframe, distributed and cybersecurity solutions, and its FC SAN business. It provides a portfolio of software solutions that enable customers to plan, develop, automate, manage and secure applications across mainframe, distributed, mobile and cloud platforms.
About the author

Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
- Significant Revenue Growth: Broadcom reported a 29% year-over-year revenue increase last quarter, reaching $19.3 billion, with management projecting a 47% year-over-year growth to $22 billion in the second quarter, highlighting strong demand and market potential in the AI sector.
- Optimistic 2027 Outlook: CEO Hock Tan revealed that Broadcom expects to generate over $100 billion in revenue by 2027, a target primarily driven by customer demand for AI chips and the company's robust capabilities in custom chips and networking equipment.
- Customer Demand Drivers: Broadcom's revenue outlook is bolstered by close collaborations with key clients like Google and OpenAI, who are accelerating investments in AI infrastructure, particularly with Google's next-generation Ironwood chip and OpenAI's custom chip plans.
- Supply Chain Advantages: Broadcom has secured leading-edge wafers and high-bandwidth memory, ensuring it can meet customer demands through 2028, thereby mitigating risks associated with chip production bottlenecks and enhancing the company's competitive position in the market.
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- AI Chip Production Agreement: Broadcom announced its agreement to produce future versions of AI chips for Google, a move that not only addresses the surging demand for AI infrastructure but also potentially enhances Broadcom's competitiveness in the high-tech market.
- Expanded Collaboration with Anthropic: Broadcom's expanded deal with AI startup Anthropic provides approximately 3.5 gigawatts of computing capacity utilizing Google's AI processors, significantly boosting Anthropic's computational resources and supporting the further development of its AI applications.
- Positive Market Reaction: Broadcom's shares rose 3% in extended trading, reflecting investor optimism regarding its partnerships with Google and Anthropic, while Alphabet's stock remained unchanged, indicating the market's keen interest in the AI sector.
- Future Demand Expectations: Broadcom CEO Hock Tan indicated that demand for computing power from Anthropic is expected to exceed 3 gigawatts by 2027, a forecast that not only highlights the rapid growth of the AI market but also supports Broadcom's long-term strategic development.
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- Long-Term Partnership: Broadcom has entered into a long-term partnership with Google to develop and supply custom Tensor Processing Units (TPUs), which is expected to enhance the performance of Google's future generations of TPUs, thereby strengthening its competitive edge in the AI sector.
- Supply Assurance Agreement: According to a filing with the U.S. Securities and Exchange Commission, Broadcom will supply networking and other components for Google's next-generation AI racks, ensuring supply assurance through 2031, which further solidifies the strategic collaboration between the two companies.
- Positive Market Reaction: Following the announcement, Broadcom's stock (AVGO) rose nearly 3% in after-hours trading, while Google's stock (GOOG) also saw a slight increase of about 0.19%, indicating market optimism regarding this partnership.
- Strategic Expansion: The existing strategic collaboration between Broadcom, Google, and Anthropic PBC has also been expanded, highlighting the potential for synergistic development in AI technology among the three parties, which may lead to broader market applications.
See More
- AI Chip Production Agreement: Broadcom announced a partnership with Google to produce future versions of AI chips, which is expected to significantly enhance the company's competitiveness in the rapidly growing AI market.
- Computing Capacity Expansion: Broadcom signed an expanded deal with AI startup Anthropic to provide approximately 3.5 gigawatts of computing capacity using Google's AI processors, addressing the surging demand for generative AI models.
- Revenue Growth Expectations: Analysts project that Broadcom will generate $21 billion in AI revenue from Anthropic in 2026, with this figure expected to rise to $42 billion in 2027, indicating strong market demand and the company's future profit potential.
- Collaboration with OpenAI: Broadcom is also collaborating with Anthropic's rival OpenAI to develop custom AI silicon, further solidifying its market position in AI infrastructure.
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- Market Performance: The S&P 500 index opened the week positively, rising for most of the session despite a brief pullback during President Trump's news conference, reflecting optimism about economic recovery.
- Oil Price Dynamics: West Texas Intermediate crude reached session highs of $114 per barrel during Trump's press conference, yet bond yields remained relatively unchanged, indicating ongoing concerns about inflation in the market.
- Executive Changes: Broadcom announced that CFO Kirsten Spears will retire in June, with Alphabet executive Amie Thuener succeeding her, and the transition is expected to be smooth as Spears will serve as an advisor.
- Strategic Partnerships: The strategic partnership between Nvidia and Marvell Technology is viewed as competitive pressure against Broadcom, leading analysts to adopt a more cautious outlook on Broadcom's future performance, reflecting market concerns.
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- Goldman Sachs Reduction: Jim Cramer's Charitable Trust sold 20 shares of Goldman Sachs at approximately $866 each, reducing its holdings to 185 shares and decreasing its portfolio weight from 5.11% to 4.65%, aligning with the trust's strategy to prevent any single position from becoming too large.
- Alphabet Increase: Concurrently, the Trust purchased 50 shares of Alphabet at around $298 each, increasing its holdings to 350 shares and raising its weight from 2.57% to 3%, utilizing proceeds from Goldman to lower its average cost basis in Alphabet, reflecting confidence in the company's long-term growth potential.
- Goldman Sachs Gains: The sale of Goldman Sachs is expected to realize a gain of about 55% based on shares purchased in December 2024, demonstrating the Trust's ability to achieve significant returns amid market volatility and reinforcing the effectiveness of its investment strategy.
- Google Cloud Revenue Potential: Analysts highlighted that Broadcom licensing TPUs to Anthropic could generate an additional $2.5 billion to $7.5 billion in high-margin revenue for Google Cloud in 2026 and 2027, which, while small compared to the projected $470 billion and $541 billion revenues, underscores Alphabet's competitive advantages in the AI race.
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