TLDR
- UBS reiterated a Buy rating and $475 price target on Broadcom (AVGO) after the company expanded its partnership with Google through 2031
- The new deal covers future TPU generations and networking components, with Anthropic set to access ~3.5GW of TPU-based compute from 2027
- Anthropic-related TPU orders are now projected at ~$50 billion, up from ~$40 billion across 2026–2027
- UBS raised its FY2027 AI revenue estimate for Broadcom to $145 billion, up from $133 billion
- Analyst reactions were mixed — Seaport Global downgraded AVGO to Neutral while Mizuho and BofA both maintained positive ratings
Broadcom (AVGO) locked in a long-term deal with Google that runs through 2031, and Wall Street is taking notice. The agreement covers future generations of TPUs plus networking and rack-level components — a meaningful extension of what was already a key customer relationship.
Anthropic is also part of the picture. The AI company will get access to roughly 3.5GW of TPU-based compute starting in 2027, provided its commercial growth continues. That’s a big number, and it moved the needle on analyst models fast.
UBS analyst Timothy Arcuri kept his Buy rating and $475 price target in place after the news. He said the announcements are “incremental to the near-term TPU risk debate,” but expects investors to shift focus toward ASIC diversification beyond TPU as MediaTek begins ramping production.
The revised UBS estimates are notable. Broadcom’s total Anthropic-linked TPU orders now sit closer to $50 billion, up from around $40 billion across calendar years 2026 and 2027 under the prior framework.
UBS now models Broadcom shipping around 7 million TPUs in calendar year 2027, up from a prior estimate of 6 million units. That revision alone says a lot about the scale of the deal.
Revenue Forecasts Get a Lift
On the revenue side, UBS bumped its FY2027 estimate to $195 billion, up from $182 billion. Its calendar year 2027 figure moved to $212 billion from $195 billion.
AI revenue for fiscal 2027 is now pegged at $145 billion versus a previous estimate of $133 billion. That figure already runs well above Broadcom’s own guidance.
Broadcom has delivered a 77% gross profit margin and 25% revenue growth over the past twelve months, according to InvestingPro data. The stock’s market cap sits at $1.76 trillion.
Billionaire Ken Fisher holds a $4.79 billion stake in AVGO, ranking it eighth in his latest list of top AI stocks. Fisher’s thesis centers on Broadcom’s ability to build custom, workload-specific silicon that general-purpose GPUs can’t replicate.
Analyst Reactions Split
Not everyone is buying in. Seaport Global Securities downgraded AVGO from Buy to Neutral, pointing to constraints within the AI industry despite Broadcom’s competitive position.
Mizuho held its Outperform rating with a $480 price target. BofA Securities also kept its Buy rating, setting a $450 target. Both firms pointed to the Google and Anthropic agreements as key reasons for their positive views.
D.A. Davidson held a Neutral rating with a $375 price target, while highlighting the value of Broadcom’s long-term agreement with Google for custom AI components.
On the product side, Broadcom also launched Arcot Smart Ruleset this month — a machine learning-based fraud detection engine aimed at improving 3-D Secure payment authentication by automating fraud logic that previously required manual updates.
The TPU deal with Google, covering supply assurance for networking and rack-level components through 2031, remains the central event driving revised analyst estimates.
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