Broadcom Inc (NASDAQ:AVGO, XETRA:1YD) shares has risen 5.6% by Tuesday afternoon following the announcement of key supply agreements with Google and Anthropic as investors cheered the chipmaker’s expanding role in the AI accelerator market.
Under the agreements, Broadcom will serve as a five-year TPU design and networking supply partner for Google, supporting the tech giant’s next-generation AI racks. In parallel, Broadcom will provide Anthropic with 3.5 gigawatts of TPU capacity starting in 2027, a modest increase from prior agreements.
Bank of America analysts cited the deals as boosting the company’s long-term visibility as a main design partner for AI tensor processing units (TPUs). Analysts noted that these partnerships “significantly increase AVGO’s visibility as a longer-term main design partner” and help reduce concerns about Google potentially insourcing or diversifying its TPU supply.
The Bank of America note highlighted that custom ASIC programs like Broadcom’s typically offer longer visibility into deployment programs. Broadcom’s share of AI accelerator deployments is expected to rise from under 10% in 2025 to roughly 15% or more in 2026 and 2027, aided by the expanded agreements with Google and Anthropic, and prior commitments with OpenAI.
The Google deal also secures Broadcom as a supplier of networking components for Google’s AI racks, including high-performance DSPs for optical transceivers and scale-up switches, further strengthening its role in AI infrastructure.
Meanwhile, Anthropic’s agreement, valued at roughly $35 billion, provides Broadcom with additional TPU capacity, though deployment is contingent on Anthropic’s commercial performance. Analysts pointed to Anthropic’s recent revenue milestone of over $30 billion in annual sales as a positive signal.
Bank of America said Broadcom’s valuation remains compelling at under 18 times projected 2027 earnings, and it sees potential for more than $30 per share in EPS by 2030, driven by multi-year ASIC programs and growing traction in networking components.