Key Takeaways
- UBS maintained its Buy recommendation and $475 price target for Broadcom (AVGO) following an extended Google partnership running through 2031
- The agreement encompasses upcoming TPU iterations and networking infrastructure, with Anthropic gaining access to approximately 3.5GW of TPU compute capacity starting in 2027
- TPU orders tied to Anthropic now total approximately $50 billion, representing an increase from the previous $40 billion estimate for 2026–2027
- UBS increased Broadcom’s fiscal 2027 AI revenue projection to $145 billion from $133 billion
- Wall Street sentiment varied — Seaport Global shifted to Neutral while Mizuho and Bank of America Securities maintained bullish positions
Broadcom (AVGO) has secured an extended collaboration with Google spanning through 2031, capturing significant attention from financial analysts. This expanded arrangement encompasses next-generation TPU development along with networking infrastructure and rack-level solutions — representing a substantial deepening of an already critical customer partnership.
The agreement also brings Anthropic into the equation. The artificial intelligence firm will receive approximately 3.5GW of TPU-powered computing resources beginning in 2027, contingent on sustained commercial expansion. This substantial commitment prompted rapid revisions to Wall Street’s financial models.
UBS analyst Timothy Arcuri reaffirmed his Buy stance with a $475 target 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 opportunities beyond TPU as MediaTek accelerates its production timeline.
The updated UBS projections carry significant weight. Total Anthropic-related TPU purchase orders for Broadcom have climbed to approximately $50 billion, compared to the earlier $40 billion estimate covering calendar years 2026 and 2027.
UBS currently forecasts Broadcom will deliver roughly 7 million TPU units during calendar 2027, representing an uptick from the previous 6 million unit projection. This adjustment alone underscores the magnitude of the arrangement.
AI Revenue Projections See Upward Revision
Regarding overall revenue, UBS elevated its fiscal 2027 forecast to $195 billion from $182 billion. The calendar year 2027 projection increased to $212 billion from $195 billion.
AI-specific revenue for fiscal 2027 now stands at $145 billion compared to the earlier $133 billion estimate. This figure substantially exceeds Broadcom’s internal guidance.
Broadcom has achieved a 77% gross profit margin alongside 25% revenue growth during the trailing twelve months, based on InvestingPro data. The company commands a market capitalization of $1.76 trillion.
Billionaire investor Ken Fisher maintains a $4.79 billion position in AVGO, placing it eighth among his leading AI stock holdings. Fisher’s investment rationale focuses on Broadcom’s capability to develop customized, application-specific processors that general-purpose GPUs cannot effectively duplicate.
Wall Street Opinions Diverge
Not all analysts share the enthusiasm. Seaport Global Securities moved AVGO from Buy to Neutral, citing broader AI industry limitations despite Broadcom’s strong competitive standing.
Mizuho preserved its Outperform designation with a $480 price objective. Bank of America Securities similarly maintained its Buy recommendation, establishing a $450 target. Both institutions referenced the Google and Anthropic partnerships as fundamental drivers of their optimistic outlooks.
D.A. Davidson retained a Neutral position with a $375 price target, while emphasizing the strategic importance of Broadcom’s extended Google agreement for customized AI solutions.
On the product front, Broadcom unveiled Arcot Smart Ruleset this month — a machine learning-powered fraud prevention system designed to enhance 3-D Secure payment verification by automating fraud detection rules that previously demanded manual configuration.
The TPU supply agreement with Google, ensuring component availability for networking and rack infrastructure through 2031, continues to be the primary catalyst behind revised Wall Street forecasts.
