Topic: Broadcom, Alphabet & the New Shape of the AI Chip Rally
Today, we’re diving into one of the most surprising — and powerful — shifts happening in the AI markets right now: the surge in Broadcom and how it’s suddenly joined Alphabet at the center of the AI-chip rally.
Investors expected Nvidia to dominate the AI-fueled semiconductor boom. But today, an unexpected duo — Alphabet and Broadcom — is giving markets something new to focus on.
Let’s break down what’s happening, why Broadcom stock is seeing one of its best days in years, and why analysts think this is just the start of something much bigger.
1. What Exactly Happened Today?
Broadcom shares surged more than 10% in a single session, marking its best day since April and putting the stock up more than 60% year-to-date. According to the article (page 1–2), Broadcom is now the top performer in the XLK (Technology Select Sector SPDR) fund — a remarkable feat for a company often overshadowed by Nvidia or AMD in headlines.
Alphabet also climbed more than 5%, extending a month-long run that has now beaten its “Magnificent Seven” peers.
What’s interesting is that this isn’t random. There’s a direct connection between the two stocks — and that connection is reshaping the AI chip competition.
2. The Silent Engine Behind Google’s AI: Broadcom’s ASIC Power
Here’s the key relationship:
Broadcom builds custom AI chips — ASICs — for Google’s internal systems.
Specifically, Broadcom co-designs and manufactures Google’s Tensor Processing Units, or TPUs.
TPUs are Google’s in-house alternative to Nvidia’s GPUs. They are purpose-built for AI workloads such as Gemini, multimodal compute, and Google’s expanding agentic AI platforms.
According to page 2 of the file, Google and Broadcom have been collaborating since 2016, and the TPU is now in its seventh generation — something analysts say is “the most proven ASIC out there outside of Nvidia’s GPU stack.”
This long-running partnership is finally paying off because AI demand isn’t just rising — it’s exploding. Google announced its monthly processed token volume jumped from 480 trillion in April to 1,300 trillion by October.
That level of compute growth doesn’t happen without massive back-end chip supply, and Broadcom is now positioned at the heart of that expansion.
3. Why Broadcom Is Suddenly Gaining Attention
For years, Broadcom has been known as a diversified semiconductor and software company — respected, profitable, but not considered part of the “AI rocket ship.”
That’s changed.
Analysts are aggressively upgrading their price targets, with the article highlighting:
- Ben Reitzes (Melius Research) raising his target to $475, calling Broadcom’s upside “huge” because TPUs are now becoming central to Alphabet’s AI strategy.
- Blayne Curtis (Jefferies) calling Broadcom his top pick, forecasting that Google’s ASIC volumes will become “much more meaningful” in 2026–2027.
- Dan Ives (Wedbush) calling Broadcom “one of the new AI plays the market is rediscovering” and suggesting the AI revolution is in “early days.”
This strong analyst sentiment is the first big driver of investor rotation into the stock.
But there’s something even bigger happening.
4. Google’s AI Breakthroughs Are Fueling Demand
Alphabet has released a wave of AI advancements this year that all rely heavily on Broadcom’s TPU infrastructure:
- Gemini 3, its newest flagship AI model
- Ironwood, Google’s upcoming 7th-generation TPU
- Nano Banana Pro, a breakthrough in AI image generation
- Google Antigravity, its next-gen agent platform
Each of these innovations requires massive custom compute, and TPUs — built with Broadcom — are at the core of that system.
Investors are now making the connection:
If Google’s AI business accelerates, Broadcom’s AI chip revenue accelerates too.
This is why Broadcom isn’t just participating in the AI rally — it’s becoming a core part of it.
5. The Real Competitive Threat: Not Nvidia vs. Broadcom… but Nvidia vs. Google
The AI chip narrative has long been Nvidia vs. the world.
But this article shows a different rivalry is emerging:
Google’s TPU roadmap is becoming a legitimate alternative to Nvidia’s GPUs.
As AI workloads scale and multimodal models demand more throughput, hyperscalers increasingly want custom silicon rather than generic GPUs. Broadcom builds exactly that — high-performance ASICs tailored to each customer’s infrastructure.
With Google leading the hyperscaler custom-chip trend, Broadcom becomes their manufacturing arm — and potentially the manufacturing arm for others.
Analysts say other cloud providers may follow Google’s lead and tap Broadcom to build their own ASICs.
If that happens, Broadcom could become the TSMC of custom AI chips — a strategic position with enormous profit potential.
6. What This Means for Investors
A. Broadcom’s Growth Is Now Directly Linked to Alphabet’s AI Ambition
As Google expands its TPU deployments, Broadcom benefits almost dollar-for-dollar in ASIC revenue.
This means AVGO is no longer just a semiconductor company — it’s now a leveraged bet on Google’s AI infrastructure.
B. The AI Chip Demand Curve Keeps Getting Steeper
Google’s jump from 480 trillion to 1,300 trillion processed tokens in six months is a clear signal:
AI workloads aren’t doubling — they’re multiplying.
The fact that Broadcom is at the center of this curve explains why Wall Street is so bullish.
C. Broadcom Stock Still Has Upside According to Analysts
Based on multiple analyst targets from the file:
- $475 (Melius Research)
- $480 (Jefferies)
The implied upside ranges from 40% to 41%.
If Broadcom continues to execute, these numbers may prove conservative.
7. Alphabet’s Role in the Rally
Alphabet is up 21% in the past month, outperforming other mega-cap peers.
The market is rewarding:
- its aggressive AI roadmap,
- its internal GPU-alternative strategy, and
- the fact that Google is no longer playing catch-up — it’s leading in areas like agents, multimodality, and custom silicon.
And when Alphabet runs, Broadcom now runs with it.
8. Final Thoughts — The New Shape of the AI Chip Landscape
The AI chip story is evolving rapidly.
At first, investors focused on Nvidia.
Then AMD and Intel entered the conversation.
Now, Alphabet and Broadcom are emerging as a third force — not by challenging Nvidia head-on, but by building an entirely different kind of AI computing ecosystem.
Broadcom’s rally isn’t a one-day anomaly. It signals a deeper shift in how hyperscalers plan to scale their AI systems:
- Away from off-the-shelf GPUs
- Toward custom, high-efficiency ASICs
- Built in deep partnership with manufacturers like Broadcom
If the TPU roadmap continues to accelerate, Broadcom may be one of the biggest long-term beneficiaries of the AI revolution — even if it isn’t the name most investors think of first.
And that’s the opportunity.