Key Highlights
- UBS maintained its Buy rating with a $475 price target for Broadcom (AVGO) following the extended Google partnership announcement through 2031
- The extended agreement encompasses upcoming TPU generations along with networking infrastructure, granting Anthropic access to approximately 3.5GW of TPU computing power starting in 2027
- TPU order projections tied to Anthropic have climbed to roughly $50 billion from the previous $40 billion estimate for 2026–2027
- UBS increased Broadcom’s AI revenue projection for FY2027 to $145 billion from the earlier $133 billion forecast
- Wall Street sentiment remains divided — Seaport Global shifted to Neutral while Mizuho and BofA Securities upheld bullish stances
Broadcom (AVGO) has secured an extended collaboration with Google extending to 2031, capturing significant attention from the investment community. This comprehensive arrangement encompasses next-generation TPU development alongside networking infrastructure and rack-level hardware — representing a substantial expansion of an already critical customer partnership.
Anthropic figures prominently in this strategic development. The artificial intelligence firm is positioned to receive approximately 3.5GW of TPU-powered computing capacity beginning in 2027, contingent on sustained commercial expansion. This substantial commitment quickly prompted analysts to revise their financial models.
UBS analyst Timothy Arcuri maintained his Buy recommendation with a $475 price objective following the disclosure. He characterized the announcements as “incremental to the near-term TPU risk debate,” while anticipating investor attention will gradually pivot toward ASIC diversification beyond TPU as MediaTek accelerates its production timeline.
The updated UBS projections carry significant weight. Anthropic-related TPU purchase orders for Broadcom now approach $50 billion, representing an increase from approximately $40 billion spanning calendar years 2026 and 2027 under previous assumptions.
UBS currently forecasts Broadcom delivering approximately 7 million TPU units in calendar year 2027, elevated from its prior 6 million unit projection. This adjustment alone underscores the transaction’s magnitude.
Upward Revenue Revisions Take Shape
Regarding revenue expectations, UBS elevated its FY2027 projection to $195 billion from $182 billion. The calendar year 2027 estimate advanced to $212 billion from the previous $195 billion benchmark.
AI-specific revenue for fiscal 2027 now stands at $145 billion compared to the earlier $133 billion forecast. This figure notably exceeds Broadcom’s internal guidance.
Broadcom has achieved a 77% gross profit margin alongside 25% revenue expansion over the trailing twelve months, per InvestingPro analysis. The company’s market capitalization currently stands at $1.76 trillion.
Billionaire investor Ken Fisher maintains a $4.79 billion position in AVGO, placing it eighth among his premier AI stock holdings. Fisher’s investment rationale emphasizes Broadcom’s capability to develop customized, workload-optimized silicon that general-purpose GPUs cannot effectively duplicate.
Mixed Wall Street Sentiment Emerges
Not all analysts share the enthusiasm. Seaport Global Securities downgraded AVGO from Buy to Neutral, citing broader AI industry limitations despite Broadcom’s strong competitive standing.
Mizuho retained its Outperform rating alongside a $480 price objective. BofA Securities similarly preserved its Buy rating, establishing a $450 target. Both institutions identified the Google and Anthropic partnerships as fundamental drivers supporting their constructive outlooks.
D.A. Davidson maintained a Neutral rating with a $375 price target, while emphasizing the strategic importance of Broadcom’s multi-year commitment with Google for specialized AI hardware.
On the product innovation front, Broadcom recently introduced Arcot Smart Ruleset — a machine learning-powered fraud prevention system designed to enhance 3-D Secure payment verification through automated fraud detection logic that eliminates manual configuration requirements.
The TPU supply agreement with Google, ensuring networking and rack-level component availability through 2031, continues to serve as the primary catalyst driving updated analyst projections.
