Key Takeaways
- UBS maintained its Buy recommendation with a $475 target on Broadcom (AVGO) following an extended Google collaboration agreement running to 2031
- The extended arrangement encompasses upcoming TPU iterations plus networking infrastructure, with Anthropic gaining access to approximately 3.5GW of TPU compute beginning in 2027
- TPU orders connected to Anthropic now total roughly $50 billion, representing an increase from the previous ~$40 billion estimate for 2026–2027
- UBS increased Broadcom’s FY2027 AI revenue forecast to $145 billion from a prior $133 billion projection
- Wall Street opinions diverged — Seaport Global moved to Neutral while Mizuho and BofA Securities sustained bullish stances
Broadcom (AVGO) has secured an extended collaboration with Google extending to 2031, capturing significant attention from financial analysts. The multi-year commitment encompasses next-generation TPUs alongside networking infrastructure and rack-level systems — representing a substantial expansion of an already critical partnership.
Anthropichas emerged as another major component in this arrangement. The artificial intelligence firm is positioned to receive approximately 3.5GW of TPU-driven computing capacity beginning in 2027, contingent upon sustained commercial expansion. This substantial commitment prompted swift adjustments to analyst financial models.
UBS’s Timothy Arcuri reaffirmed his Buy stance with a $475 valuation 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 capabilities as MediaTek accelerates its production timeline.
The updated UBS projections carry significant weight. Anthropic-associated TPU commitments now approach $50 billion, reflecting an increase from approximately $40 billion spanning calendar years 2026 and 2027 under previous assumptions.
UBS currently forecasts Broadcom delivering approximately 7 million TPU units during calendar year 2027, elevated from an earlier 6 million unit projection. This upward revision underscores the partnership’s substantial magnitude.
Upward Revenue Trajectory
Regarding revenue projections, UBS elevated its FY2027 estimate to $195 billion from $182 billion. The calendar year 2027 forecast advanced to $212 billion, up from $195 billion previously.
AI-specific revenue for fiscal 2027 now stands at $145 billion compared to the earlier $133 billion estimate. This projection significantly exceeds Broadcom’s internal guidance figures.
Broadcom has posted a 77% gross profit margin alongside 25% revenue expansion over the trailing twelve months, per InvestingPro analytics. The company commands a $1.76 trillion market capitalization.
Billionaire investor Ken Fisher maintains a $4.79 billion position in AVGO, placing it eighth among his premier AI equity holdings. Fisher’s investment rationale emphasizes Broadcom’s capability to engineer custom, application-optimized silicon that general-purpose GPUs cannot match.
Divided Street Sentiment
Not all analysts share the enthusiasm. Seaport Global Securities lowered AVGO from Buy to Neutral, citing broader AI sector limitations despite Broadcom’s strong competitive standing.
Mizuho retained its Outperform designation with a $480 price objective. BofA Securities similarly preserved its Buy rating while establishing a $450 target. Both institutions cited the Google and Anthropic partnerships as primary justifications for their constructive outlooks.
D.A. Davidson maintained a Neutral position with a $375 price target, while emphasizing the strategic importance of Broadcom’s extended Google arrangement for customized AI silicon.
On the product development front, Broadcom introduced Arcot Smart Ruleset during the current month — a machine learning-powered fraud prevention system designed to enhance 3-D Secure payment verification by automating fraud detection rules that traditionally demanded manual configuration.
The TPU partnership with Google, guaranteeing supply continuity for networking and rack infrastructure through 2031, remains the primary catalyst behind revised Wall Street forecasts.
