Broadcom (AVGO) shares are up 3.2% at the time of writing on announcing multiyear chip deals with Alphabet (GOOGL) and AI startup Anthropic. The chip giant will develop and supply custom TPUs (Tensor Processing Units) and networking components for Google’s AI data centers through 2031. A TPU is a specialized processor for machine learning. Additionally, Anthropic will gain access to 3.5 gigawatts of computing power from Google’s AI processors, starting in 2027.
Claim 30% Off TipRanks
Trade NVDA with leverageWhy This Matters for Broadcom
These deals boost Broadcom’s key role in custom chips (ASICs) and networking gear for Google’s AI infrastructure. They also provide clear visibility into future AI demand, capacity planning, and revenue from its ASIC business.
The deals position Broadcom at the heart of training and deploying large models. Demand for custom silicon like TPUs has surged recently. Hyperscalers and startups are seeking efficient alternatives to Nvidia’s (NVDA) costly GPUs (graphics processing units).
Broadcom Secures TPU Dominance
The long-term deal with Google covers custom TPUs for next-gen processors, plus networking and components for advanced AI racks. These components are vital for linking huge chip clusters that train and run neural networks like Google’s Gemini. This partnership cements Broadcom as Google’s main design partner for cutting-edge AI chips.
Anthropic Hits $30B Run Rate
Anthropic’s new deal builds on its commitment to invest $50 billion in strengthening U.S. computing infrastructure. Demand for its AI model Claude has accelerated in 2026, driving its run-rate revenue to over $30 billion, up from about $9 billion at the end of 2025. The startup now has over 1,000 business clients spending more than $1 million annually, double the number from just two months ago.
Anthropic trains and runs Claude on a range of AI hardware, including Amazon Web Services’ (AMZN) Trainium, Google TPUs, and Nvidia GPUs.
Is AVGO Stock a Good Buy?
On TipRanks, AVGO stock has a Strong Buy consensus rating based on 27 Buys and three Hold ratings. The average Broadcom price target of $465.55 implies 43.4% upside potential from current levels. Over the past year, AVGO shares have surged 104%.
