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The AI drumbeat is still pounding
Broadcom got a nice little caffeine shot Wednesday, with shares up nearly 6% after JPMorgan told the market to relax: the company’s long-term AI chip business still looks intact. In other words, the Street was nervously doom-scrolling about Google’s TPU plans, and JPMorgan basically said, “not so fast.”
Google rumors, meet reality
The broker reiterated its Overweight rating on Broadcom and said Google’s TPU v9 program is still on track for volume production in calendar 2028. That matters because Broadcom is supposedly a key part of the custom silicon plumbing behind Google’s AI ambitions — and if that pipeline keeps flowing, Broadcom keeps racking up years of visibility instead of quarters of vibes.
Why investors care
JPMorgan also pointed to a five-year agreement signed in March that it says could keep Broadcom in the TPU mix across multiple generations, from v8 through v11. That’s the kind of long-dated AI exposure investors love, because it turns a hot theme into something closer to a recurring revenue machine.
- Broadcom is being tied to six frontier AI model developers, including Google, OpenAI, Anthropic, and Meta
- JPMorgan thinks AI revenue could climb 2x to 2.5x in 2027 and then double again in 2028
- Translation: this isn’t just a one-chip wonder story
The bigger picture
Broadcom’s rally wasn’t happening in a vacuum either; tech was having a decent day, with the Nasdaq and XLK both up. But the real fuel here is still the same old AI race: if big tech keeps spending, Broadcom keeps cashing in. Big picture: the market may still be underpricing how sticky Broadcom’s role could be in the custom-AI arms race.