Goldman says Google, Anthropic partnerships reinforce Broadcom advantage

Goldman Sachs notes that Broadcom (AVGO) announced that it has entered into a long-term agreement with Google (GOOGL) to develop and supply its future generations of TPUs, and a Supply Assurance Agreement to supply networking and other components to be used in Google’s AI racks through 2031. Broadcom, Google and Anthropic also expanded their current strategic collaboration. The firm sees strategic merit in this announcement on multiple fronts. Broadcom has growing and increasingly diverse exposure to key customers with leading AI models, which should position the company as a key AI beneficiary, says Goldman. The firm also believes it should bolster investor confidence in the sustainability of the Broadcom-Google partnership for future TPUs. Lastly, Goldman argues that the supply assurance agreement reinforces Broadcom’s strong market position in AI networking. The firm reiterates a Buy rating on Broadcom with a price target of $480.