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    Why Broadcom (AVGO) Is Up 18.1% After Long-Term TPU Deals With Google And Anthropic

    Simply Wall St·04/12/2026 00:35:30
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    • In early April 2026, Broadcom announced a long-term agreement to develop and supply custom Tensor Processing Units to Google through 2031, while also expanding its collaboration with Anthropic, which will access roughly 3.50 gigawatts of next-generation TPU-based AI compute capacity via Broadcom starting in 2027.
    • These deals effectively tie Broadcom’s custom silicon and networking roadmap directly into the build-out of hyperscale AI data centers, deepening its role as a core infrastructure partner for both a leading cloud provider and a fast-growing AI model developer.
    • Now we’ll examine how locking in TPU design and supply agreements with Google through 2031 could reshape Broadcom’s AI-driven investment narrative.

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    Broadcom Investment Narrative Recap

    To own Broadcom, you need to believe its AI custom silicon and networking franchise, now anchored by long-term Google TPU and Anthropic compute deals, can offset softer legacy chip markets and the execution risk in VMware. These agreements look supportive of the key near term catalyst, AI accelerator and networking growth, while amplifying the biggest current risk: heavy dependence on a handful of hyperscalers whose spending plans and insourcing decisions could quickly ripple through revenue.

    Among Broadcom’s recent announcements, the launch of the Arcot Smart Ruleset on April 8 stands out because it quietly reinforces the software catalyst behind the story. While investors are focused on multi-year AI chip backlogs, Arcot’s machine learning based fraud engine underscores that VMware and security software are also evolving, offering a counterweight if AI hardware demand becomes lumpier than expected.

    Yet, against all this optimism, the growing concentration in a few hyperscale AI customers is a risk investors should be aware of if those buyers ever decide to...

    Read the full narrative on Broadcom (it's free!)

    Broadcom's narrative projects $119.6 billion revenue and $50.8 billion earnings by 2028. This requires 25.9% yearly revenue growth and a $32.0 billion earnings increase from $18.8 billion today.

    Uncover how Broadcom's forecasts yield a $472.01 fair value, a 27% upside to its current price.

    Exploring Other Perspectives

    AVGO 1-Year Stock Price Chart
    AVGO 1-Year Stock Price Chart

    Some of the most optimistic analysts were already penciling in revenue above US$260 billion and earnings over US$130 billion by 2029, so this Google TPU news could either reinforce that bullish view or expose how dependent that upside is on a few hyperscaler relationships.

    Explore 34 other fair value estimates on Broadcom - why the stock might be worth as much as 47% more than the current price!

    Decide For Yourself

    Disagree with existing narratives? Extraordinary investment returns rarely come from following the herd, so go with your instincts.

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    This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.