Key Takeaways
- UBS maintained its Buy recommendation on Broadcom (AVGO) with a $475 target following an extended Google collaboration running until 2031
- The expanded agreement encompasses upcoming TPU iterations plus networking infrastructure, with Anthropic gaining access to approximately 3.5GW of TPU compute capacity starting 2027
- TPU order projections tied to Anthropic have climbed to roughly $50 billion from an earlier estimate of $40 billion spanning 2026–2027
- UBS increased Broadcom’s fiscal 2027 AI revenue projection to $145 billion from a prior $133 billion forecast
- Wall Street sentiment remains divided — Seaport Global moved to Neutral while Mizuho and BofA Securities sustained bullish outlooks
Broadcom (AVGO) has secured an extended collaboration with Google stretching to 2031, capturing significant attention from the investment community. This comprehensive arrangement encompasses next-generation Tensor Processing Units alongside networking infrastructure and rack-level technologies — representing a substantial expansion of an already critical partnership.
The AI research firm Anthropic factors prominently in this development. The organization is set to receive approximately 3.5GW of TPU-powered computing resources beginning in 2027, contingent on sustained commercial expansion. This substantial commitment rapidly influenced analyst financial models.
UBS’s Timothy Arcuri maintained his Buy recommendation with a $475 price objective 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 strategies beyond TPU as MediaTek accelerates manufacturing.
The updated UBS projections carry significant weight. Broadcom’s cumulative Anthropic-associated TPU orders now approach $50 billion, representing 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 2027, elevated from an earlier projection of 6 million units. This single adjustment underscores the partnership’s magnitude.
Financial Projections Receive Upward Adjustment
Regarding revenue expectations, UBS elevated its fiscal 2027 estimate to $195 billion from $182 billion. The calendar year 2027 projection advanced to $212 billion from $195 billion.
AI-specific revenue for fiscal 2027 now stands at $145 billion compared to a previous $133 billion estimate. This projection substantially exceeds Broadcom’s internal guidance.
Broadcom has achieved a 77% gross profit margin alongside 25% revenue expansion over the trailing twelve months, per InvestingPro data. 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 holdings. Fisher’s investment rationale emphasizes Broadcom’s capability to engineer custom, application-optimized semiconductors that general-purpose GPUs cannot effectively duplicate.
Wall Street Consensus Remains Mixed
Not all analysts share the enthusiasm. Seaport Global Securities shifted AVGO from Buy to Neutral, citing industry-wide AI constraints despite Broadcom’s strong competitive standing.
Mizuho retained its Outperform stance with a $480 price objective. BofA Securities likewise preserved its Buy rating, establishing a $450 target. Both institutions cited the Google and Anthropic arrangements as primary drivers for maintaining constructive views.
D.A. Davidson sustained a Neutral rating with a $375 price target, while emphasizing the strategic importance of Broadcom’s extended Google agreement for customized AI components.
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 logic that traditionally required manual configuration.
The TPU agreement with Google, ensuring supply continuity for networking and rack-level infrastructure through 2031, continues driving the revised Wall Street estimates.
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