Shares of Broadcom (AVGO) rose on Tuesday following the announcement of new AI chip deals with Alphabet (GOOGL) and Anthropic. The agreements, extending through 2031, focus on tensor processing units (TPUs) for Google’s AI data centers. Broadcom stock remains down for the year amid broader AI sector volatility but is viewed by analysts as a key competitor to Nvidia.
Broadcom has secured significant AI chip development deals with Alphabet and Anthropic. The partnerships will run through 2031 and center on the development of tensor processing units.
Broadcom will specifically help design these TPUs for Google’s AI data centers. Separately, Anthropic will gain access to 3.5 gigawatts of computing capacity from Google’s AI chips starting in 2027.
The news provided a lift to Broadcom shares, though they remain down 6.8% for the year. Wall Street experts forecast a bright future for the semiconductor developer despite recent AI-driven market pessimism.
The company is considered a healthy competitor to AI chipmaker Nvidia. It was one of the market’s top performers last year during the initial surge in AI investment.
Alphabet stock also moved higher this week, gaining over 7% in the last five days. The deal with Broadcom underscores Alphabet‘s strategic positioning for future AI growth.
Anthropic has rapidly become a prominent U.S. AI company. Its role is central to Alphabet‘s AI development strategy.
Broadcom recently posted strong quarterly results for its first quarter of fiscal 2026. Revenue totaled $19.3 billion for the period ending Feb. 1, a 29% increase from the prior year.
The company’s net income for the quarter rose 34% to $7.3 billion. This performance highlighted the massive growth opportunities in its core markets.
Analyst forecasts project Broadcom‘s earnings per share will grow 66% in FY 2026. Growth is then expected to continue at a 57% rate in FY 2027.
CEO Hock Tan stated the company’s AI chip revenue will exceed $100 billion in 2027. This anticipated revenue boom could directly influence the company’s stock performance.
