Key Takeaways
- AVGO shares climbed more than 5.7% following major AI infrastructure partnership expansions with Google and Anthropic
- A multiyear TPU and networking supply agreement with Google extends through 2031
- Anthropic will utilize approximately 3.5 gigawatts of TPU compute infrastructure via Broadcom beginning in 2027
- First-quarter AI-related revenue reached $8.4 billion, representing 106% growth versus the prior year
- Seaport Global Securities shifted its rating to Neutral on valuation grounds
Broadcom’s share price has experienced significant momentum recently. Following a dip below $300 in late March, AVGO rebounded to approximately $375 by April 10, propelled by substantial AI collaboration announcements and improving market conditions.
The most significant catalyst emerged on April 7, when Broadcom, Alphabet, and Anthropic collectively revealed expanded AI infrastructure collaborations. Shares surged over 6% during that trading session.
Broadcom and Google established a long-term framework for Broadcom to engineer and deliver upcoming iterations of Google’s Tensor Processing Units. Additionally, the companies executed a Supply Assurance Agreement positioning Broadcom to furnish networking infrastructure for Google’s next-wave AI systems extending to 2031.
Networking solutions represented approximately one-third of Broadcom’s AI-derived revenue in the most recent quarter, underscoring the material significance of this arrangement.
Google remains Broadcom’s primary and most enduring custom silicon partner. This extended commitment encompasses several future TPU iterations, providing Broadcom with exceptional revenue predictability from its top client.
Anthropic Partnership Unlocks Substantial Future Revenue Potential
The Anthropic component represents a particularly compelling development. Beginning in 2027, Anthropic will deploy roughly 3.5 gigawatts of TPU-powered AI computing infrastructure through Broadcom.
Bernstein analyst Stacy Rasgon has calculated that Broadcom typically generates approximately $20 billion in revenue per gigawatt. Using that framework, the Anthropic arrangement carries substantial financial implications.
Previously, Broadcom indicated Anthropic’s requirements were “expected” to surpass 3 gigawatts. The updated announcement strengthens this language — Anthropic “will” utilize over 3.5 gigawatts, with Broadcom indicating this forms part of an even broader, extended engagement.
Broadcom included a qualification: this expansion hinges on Anthropic’s “continued commercial success.” However, that threshold appears readily achievable currently. Anthropic’s annualized revenue trajectory jumped from $9 billion at year-end 2025 to $30 billion by early April — tripling within merely three months.
Robust Financial Performance Underpins Growth Story
These partnership developments built upon already-strong operational results. Broadcom delivered Q1 earnings per share of $2.05, exceeding the $2.03 analyst consensus, while revenue reached $19.31 billion versus $19.10 billion expectations.
AI-specific revenue totaled $8.4 billion for the quarter, reflecting 106% year-over-year expansion, powered by heightened demand for customized AI accelerators and networking solutions.
A Pakistan-mediated two-week ceasefire between Iran and the United States, announced April 7, simultaneously boosted overall market confidence. With a beta coefficient of 1.24, Broadcom typically exhibits amplified movement relative to broader indices, and the improved risk appetite provided additional momentum.
Not all observers share this optimism. Seaport Global Securities lowered AVGO to Neutral, contending that AI-fueled growth is already incorporated into consensus projections and that immediate upside potential appears constrained. The market largely dismissed this assessment.
Broadcom’s annual revenue run rate has expanded from $9 billion to $30 billion at Anthropic, its most recent major client, within just three months.
