Key Takeaways
- UBS maintained its Buy recommendation with a $475 target on Broadcom (AVGO) following an expanded Google collaboration extending to 2031
- The extended agreement encompasses upcoming TPU iterations and associated networking infrastructure, with Anthropic gaining access to approximately 3.5GW of TPU computing power from 2027
- TPU orders linked to Anthropic now reach an estimated $50 billion, representing a $10 billion increase from previous projections spanning 2026–2027
- UBS increased Broadcom’s FY2027 AI revenue forecast to $145 billion from the prior $133 billion estimate
- Wall Street opinions diverged — Seaport Global moved to Neutral while Mizuho and BofA Securities sustained bullish stances
Broadcom (AVGO) has secured a multi-year commitment with Google extending to 2031, capturing significant attention from financial analysts. This comprehensive arrangement encompasses next-generation TPU development alongside networking infrastructure and rack-level systems — representing a substantial expansion of an already critical client partnership.
The arrangement incorporates Anthropic as a significant participant. The artificial intelligence firm will receive access to approximately 3.5GW of TPU-powered computing resources beginning in 2027, contingent upon sustained commercial expansion. This substantial commitment prompted rapid adjustments across Wall Street financial models.
UBS analyst Timothy Arcuri maintained his Buy recommendation alongside the $475 target price 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 operations.
The updated UBS projections carry significant weight. Broadcom’s cumulative Anthropic-related TPU commitments now approach $50 billion, representing an increase from approximately $40 billion across calendar years 2026 and 2027 under previous assumptions.
UBS currently forecasts Broadcom delivering approximately 7 million TPU units during calendar year 2027, elevated from the previous 6 million unit projection. This single adjustment underscores the magnitude of the commercial agreement.
AI Revenue Projections Climb Higher
Regarding revenue expectations, UBS elevated its FY2027 projection to $195 billion from $182 billion. The calendar year 2027 forecast advanced to $212 billion from the prior $195 billion estimate.
Artificial intelligence revenue for fiscal 2027 now stands at $145 billion compared to the earlier $133 billion projection. This figure substantially exceeds Broadcom’s own forward guidance.
Broadcom has posted a 77% gross profit margin alongside 25% revenue expansion over the trailing twelve months, per InvestingPro data. The company’s market capitalization currently stands at $1.76 trillion.
Prominent investor Ken Fisher maintains a $4.79 billion position in AVGO, placing it eighth among his leading AI equity holdings. Fisher’s investment rationale emphasizes Broadcom’s capability to develop customized, application-specific silicon that general-purpose GPUs cannot effectively duplicate.
Wall Street Views Diverge
Not all analysts share the enthusiasm. Seaport Global Securities revised AVGO from Buy to Neutral, citing headwinds within the AI sector despite Broadcom’s strong competitive positioning.
Mizuho preserved its Outperform designation with a $480 target. BofA Securities similarly maintained its Buy rating, establishing a $450 objective. Both institutions cited the Google and Anthropic partnerships as primary drivers for their constructive outlooks.
D.A. Davidson retained a Neutral stance with a $375 price target, while acknowledging the strategic importance of Broadcom’s long-term supply arrangement with Google for specialized AI hardware.
On the product development front, Broadcom introduced Arcot Smart Ruleset this month — a machine learning-powered fraud prevention system designed to enhance 3-D Secure payment verification by automating fraud detection protocols that historically required manual configuration.
The TPU supply agreement with Google, ensuring availability of networking and rack infrastructure through 2031, continues to serve as the primary catalyst behind updated analyst projections.
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