Broadcom (AVGO) Stock Surges on Extended Google Partnership and Raised AI Revenue Projections

Key Takeaways

• UBS maintained its Buy recommendation with a $475 price objective for Broadcom (AVGO) following an extended Google collaboration lasting until 2031
• The expanded agreement includes next-generation TPU systems and networking infrastructure, granting Anthropic access to approximately 3.5GW of TPU compute capacity starting 2027
• TPU order projections tied to Anthropic have climbed to roughly $50 billion from approximately $40 billion spanning 2026–2027
• UBS increased Broadcom’s fiscal 2027 AI revenue projection to $145 billion from a previous $133 billion estimate
• Wall Street responses varied — Seaport Global shifted AVGO to Neutral while Mizuho and BofA Securities retained bullish stances

Broadcom (AVGO) has secured a comprehensive multi-year arrangement with Google extending into 2031, capturing significant attention from financial analysts. This expanded partnership encompasses upcoming TPU technology iterations alongside networking infrastructure and rack-level systems — representing a substantial deepening of an already critical client relationship.

Broadcom Inc., AVGO

The arrangement also integrates Anthropic into the equation. Beginning in 2027, the artificial intelligence firm is positioned to receive approximately 3.5GW worth of TPU-powered computational resources, contingent upon sustained commercial expansion. This substantial commitment rapidly influenced analyst financial modeling.

UBS analyst Timothy Arcuri maintained his Buy position with a $475 price objective following the announcement. He characterized the developments as “incremental to the near-term TPU risk debate,” while anticipating investor attention will pivot toward ASIC diversification beyond TPU technology as MediaTek accelerates manufacturing.

The updated UBS projections carry significant weight. Anthropic-connected TPU orders for Broadcom now approach $50 billion, representing an increase from the approximately $40 billion estimated across calendar years 2026 and 2027 under previous assumptions.

UBS currently projects Broadcom will deliver approximately 7 million TPU units during calendar year 2027, elevated from an earlier 6 million unit forecast. This single adjustment underscores the magnitude of the partnership.

Top-Line Projections Move Higher

Regarding overall revenue expectations, UBS elevated its FY2027 projection to $195 billion from $182 billion. Its calendar 2027 estimate advanced to $212 billion from $195 billion.

AI-specific revenue for fiscal 2027 now stands at $145 billion compared with the prior $133 billion estimate. This projection already exceeds Broadcom’s internal guidance considerably.

Broadcom has achieved a 77% gross profit margin alongside 25% revenue expansion over the trailing twelve months, per InvestingPro analytics. The company’s market capitalization currently stands at $1.76 trillion.

Billionaire investor Ken Fisher maintains a $4.79 billion position in AVGO, positioning it as his eighth-largest AI equity holding. Fisher’s investment rationale emphasizes Broadcom’s capability to develop customized, application-specific chips that general-purpose GPUs cannot effectively duplicate.

Wall Street Opinion Diverges

Not all analysts share the optimistic view. Seaport Global Securities lowered AVGO from Buy to Neutral, citing broader AI sector limitations despite Broadcom’s strong competitive positioning.

Mizuho maintained its Outperform designation with a $480 price objective. BofA Securities similarly preserved its Buy rating, establishing a $450 target. Both institutions cited the Google and Anthropic arrangements as primary drivers supporting their constructive outlooks.

D.A. Davidson retained a Neutral stance with a $375 price target, while emphasizing the strategic importance of Broadcom’s extended Google partnership for customized AI silicon.

On the product development front, Broadcom recently introduced Arcot Smart Ruleset this month — a machine learning-powered fraud prevention platform designed to enhance 3-D Secure payment verification by automating fraud detection logic that historically required manual configuration.

The TPU partnership with Google, guaranteeing supply continuity for networking and rack-level infrastructure through 2031, remains the primary catalyst behind revised analyst financial models.