Broadcom Surges 18% on Google, Anthropic AI Deals
Broadcom locks in landmark custom chip agreements with Google and Anthropic, cementing its position as AI infrastructure's silent powerhouse.
Broadcom just had its best week of the year—and it wasn't even close.
Shares of the chipmaker surged 18.1% over the past five trading sessions, making it the top performer among large-cap semiconductors. The catalyst: expanded custom AI chip agreements with Google and Anthropic that could generate $63 billion in revenue through 2027.
While Nvidia dominates headlines, Broadcom has quietly become the backbone of hyperscaler AI infrastructure. These deals make that position official.
The Deals
Broadcom announced two separate agreements last week:
Google: An expanded partnership to produce future generations of Google's Tensor Processing Units (TPUs). Broadcom already manufactures current-generation TPUs, but the new deal extends through 2031 and covers Google's next-generation AI accelerator architecture.
Anthropic: A capacity agreement giving the AI startup access to approximately 3.5 gigawatts of computing power, primarily sourced from Google's TPU clusters. Most infrastructure will be U.S.-based.
Mizuho analysts estimate Broadcom will capture $21 billion in AI-related revenue from Anthropic alone in 2026, doubling to $42 billion in 2027.
Why This Matters
The custom chip business differs fundamentally from selling GPUs off the shelf.
Nvidia wins on performance and ecosystem. Anyone can buy H100s or Blackwell systems. But hyperscalers increasingly want chips tailored to their specific workloads—and they want to own the designs.
Google built TPUs because it runs workloads no one else runs at that scale. Amazon has Trainium and Inferentia. Microsoft is developing Maia. These companies don't want to pay Nvidia margins if they can help it.
Broadcom's edge: it can manufacture these custom designs better than anyone. The company's networking and ASIC expertise, combined with its access to TSMC's advanced nodes, makes it the go-to partner for hyperscaler chip projects.
Anthropic's Explosive Growth
The Anthropic deal revealed something else: the AI lab's revenue has exploded.
Run-rate revenue topped $30 billion, up from $9 billion at the end of 2025. That's a tripling in four months. Business customers spending over $1 million annually now exceed 1,000—double the count from February.
Claude's enterprise adoption is accelerating faster than expected. And every inference Anthropic serves runs on custom hardware that Broadcom helped build.
Stock Performance
| Metric | Value |
|---|---|
| Weekly Gain | +18.1% |
| YTD Return | +34.2% |
| Price | $371.45 |
| Forward P/E | 28x |
Broadcom shares jumped 6% on April 7 alone—their second-best single day of the year—following the deal announcements.
The stock has outperformed the broader semiconductor sector and the S&P 500 since the agreements were disclosed.
Valuation Question
At 28x forward earnings, Broadcom trades at a premium to foundry partners like TSMC but below GPU leader Nvidia.
Bulls argue the custom chip opportunity is underappreciated. The company guided for Q2 AI revenue of $10.7 billion—up 140% year-over-year. If the Google and Anthropic contracts represent the template for future hyperscaler deals, that growth trajectory extends for years.
Bears point to customer concentration risk. Google and Anthropic now represent an outsized share of AI revenue. If either relationship sours or TPU demand slows, the multiple compresses fast.
The Bigger Picture
AI infrastructure spending shows no sign of slowing. The hyperscalers committed $650 billion in 2026 capex, up 71% year-over-year. Much of that flows to custom silicon.
Broadcom won't displace Nvidia in the GPU market. But in the custom chip business—where the customer owns the design and needs a manufacturing partner—it has no peer.
The Google and Anthropic deals suggest that market is bigger than anyone realized.