Key Takeaways
- UBS maintained its Buy recommendation on Broadcom (AVGO) with a $475 target following the extended Google collaboration through 2031
- The extended agreement encompasses upcoming TPU iterations along with networking infrastructure, while Anthropic gains access to approximately 3.5GW of TPU compute capacity starting 2027
- Total TPU orders linked to Anthropic now stand at roughly $50 billion, reflecting an increase from the previous $40 billion estimate for 2026–2027
- UBS adjusted Broadcom’s FY2027 AI revenue projection upward to $145 billion from the earlier $133 billion forecast
- Wall Street responses varied — Seaport Global shifted to Neutral while Mizuho and BofA Securities retained constructive stances
Broadcom (AVGO) secured an extended collaboration with Google spanning through 2031, drawing considerable attention from financial analysts. This arrangement encompasses upcoming TPU generations alongside networking infrastructure and rack-level systems — representing a substantial expansion of an already critical customer tie.
Anthropic factors into this development as well. The artificial intelligence firm gains access to approximately 3.5GW of TPU-powered computing resources beginning in 2027, contingent on sustained commercial expansion. This substantial commitment prompted swift adjustments to Wall Street financial models.
UBS analyst Timothy Arcuri maintained his Buy stance 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 gravitate toward ASIC diversification opportunities beyond TPU as MediaTek accelerates manufacturing.
The updated UBS projections carry significant weight. Broadcom’s aggregate Anthropic-associated TPU orders now approach $50 billion, representing an increase from approximately $40 billion spanning calendar years 2026 and 2027 under earlier assumptions.
UBS currently forecasts Broadcom delivering approximately 7 million TPU units during calendar year 2027, elevated from a previous 6 million unit projection. This adjustment alone underscores the magnitude of the partnership.
Projected Revenue Figures Rise
Regarding revenue projections, UBS elevated its FY2027 estimate to $195 billion from $182 billion. The calendar year 2027 figure advanced to $212 billion from $195 billion.
AI-related revenue for fiscal 2027 now stands at $145 billion compared to the prior $133 billion estimate. This projection substantially exceeds Broadcom’s own 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 market capitalization of $1.76 trillion.
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 develop customized, application-specific silicon that general-purpose GPU solutions cannot match.
Wall Street Perspectives Diverge
Universal agreement remains elusive. Seaport Global Securities moved AVGO from Buy to Neutral, citing broader AI industry limitations despite Broadcom’s strong competitive positioning.
Mizuho preserved its Outperform designation with a $480 price objective. BofA Securities likewise maintained its Buy recommendation, establishing a $450 target. Both research firms cited the Google and Anthropic arrangements as fundamental drivers supporting their constructive outlooks.
D.A. Davidson retained a Neutral rating with a $375 price target, while emphasizing the strategic importance of Broadcom’s extended Google agreement for specialized AI components.
On the product development front, Broadcom introduced Arcot Smart Ruleset this month — a machine learning-powered fraud detection platform designed to enhance 3-D Secure payment authentication through automated fraud logic that eliminates previous manual configuration requirements.
The TPU partnership with Google, ensuring supply commitments for networking and rack-level infrastructure through 2031, continues to serve as the primary catalyst driving updated analyst projections.
