Broadcom (NASDAQ:AVGO | AVGO Price Prediction) shares are up 6% in midday trading on Tuesday, rising from $314.43 to nearly $333 as the company announced landmark long-term AI supply agreements with Alphabet‘s (NASDAQ:GOOGL) Google and AI startup Anthropic. The move is especially notable because it’s happening while the broader tech sector is sliding, with the Invesco QQQ Trust (NASDAQ:QQQ) shares down 0.56% today.
Broadcom is bucking the trend, rising quickly even while the broader NASDAQ 100 slides. While macro uncertainty continues to weigh on most tech names, Broadcom’s AI-specific pipeline is giving investors something concrete to rally around: durable, long-term revenue commitments from two of the most significant players in the AI infrastructure buildout.
That said, it’s worth keeping today’s move in context. Despite the surge, AVGO shares remain down 4% year-to-date as of yesterday’s close, reflecting the turbulent start to 2026 for semiconductor stocks broadly. Today’s gains are a meaningful step, but they don’t erase the recent pressure.
Google TPU Deal and Anthropic Expansion Drive the Surge
The primary catalyst is Broadcom’s announcement of a long-term agreement to supply custom AI processors to Alphabet’s Google, providing multi-year revenue visibility that the market is clearly rewarding. We recently provided a deeper look at why this deal matters for AI infrastructure. Google’s reliance on Broadcom’s custom silicon for its Tensor Processing Units (TPUs) is a relationship that’s difficult to replicate quickly, and locking it in long-term is a strategic win.
The secondary catalyst is an expanded collaboration with Anthropic, cementing Broadcom further into the AI semiconductor supply chain. Anthropic’s rapid growth as an AI model developer means its infrastructure needs are scaling fast, and Broadcom’s custom accelerators are positioned squarely in the path of that demand.
Reddit sentiment shifted sharply alongside the announcements. On wallstreetbets, a post titled “BROADCOM INC AND GOOGLE ENTER LONG-TERM TPU AND NETWORKING SUPPLY AGREEMENT THROUGH 2031” reached 280 upvotes and 55 comments by early Tuesday morning, reflecting genuine retail enthusiasm for the deal’s long-term implications.
AI Revenue Momentum Was Already Accelerating
Today’s deals don’t come out of nowhere. Broadcom’s most recent earnings, reported March 4, showed AI semiconductor revenue of $8.4 billion in Q1 fiscal 2026, up 106% year-over-year, doubling in a single year. Total revenue came in at $19.31 billion, beating the consensus estimate of $19.14 billion and growing 29.47% year-over-year.
Broadcom CEO Hock Tan set an ambitious target on that call, asserting, “Our AI revenue growth is accelerating, and we expect AI semiconductor revenue to be $10.7 billion in Q2.” He has also stated a goal of exceeding $100 billion in AI sales by 2027. Today’s deal announcements make that target feel considerably more credible.
Broadcom’s Q2 fiscal 2026 revenue guidance of approximately $22 billion, representing 47% year-over-year growth, was already a bold forecast. Long-term supply agreements with Google and Anthropic provide the kind of demand visibility that makes that number look increasingly achievable rather than aspirational.
Why Revenue Clarity Matters Right Now
In a macro environment where uncertainty is elevated and tech valuations are under pressure, long-term supply contracts function like a visibility premium. Investors can model future revenue with more confidence when hyperscalers are locked into multi-year agreements, and that confidence is worth something real in a market that’s been punishing ambiguity.
Broadcom’s custom AI accelerator business is structurally different from general-purpose GPU suppliers. These are bespoke chips designed to a customer’s exact specifications, making switching costs extremely high. That’s a competitive moat that’s hard to quantify but easy to appreciate when you see Google committing to a supply agreement stretching years into the future.
Analyst consensus for AVGO stock remains firmly bullish, with 48 buy ratings, 2 hold ratings, and zero sell ratings, and a consensus price target of $471.55. Broadcom stock’s 52-week high of $412.95 suggests there’s meaningful room above today’s price if the AI partnership thesis continues to play out.
What to Watch For Next
Watch for whether today’s gains hold into the close, particularly given the broader market’s weakness. If AVGO stock can finish the session solidly above $330, that could signal conviction behind the AI deal narrative rather than a reflexive intraday pop.
Broadcom also recently appointed Amie Thuener, Alphabet’s chief accounting officer since 2018, as its new CFO, effective June 12. That hire deepens the organizational ties between Broadcom and its largest AI customer, and it’s a detail worth watching as the Google partnership evolves through the year.
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