Broadcom Stock Jumps on Google, Anthropic AI Chip Deals

This article first appeared on GuruFocus.

Broadcom (NASDAQ:AVGO) shares rose about 4% on Tuesday after the chipmaker said it signed multiyear agreements with Alphabet (NASDAQ:GOOGL) and Anthropic to supply custom AI processors and networking gear.

The deals run through 2031 and center on tensor processing units, or TPUs, which Broadcom will help develop for Google's AI data centers. Anthropic will also get access to 3.5 gigawatts of computing capacity from Google's AI chips starting in 2027.

The agreements give Broadcom more visibility into demand for its custom chip and networking business at a time when cloud providers are looking for alternatives to Nvidia's graphics processors. They also deepen the company's role in the infrastructure used to train and run large AI models.

Broadcom said the Google pact covers next-generation TPUs, networking parts and other components used in advanced AI racks.