- Broadcom shares rose approximately 12% over five days, including a 10% increase on Monday.
- Alphabet, Google’s parent company, is expanding its use of AI chips, benefiting Broadcom as a key supplier.
- Analysts highlight Broadcom‘s role in supplying Google’s TPU AI chips, a major revenue source.
- Raymond James assigned Broadcom an “Outperform” rating with a $420 price target, in line with the growing AI semiconductor market.
- Broadcom shares trade near their 52-week high and above the 200-day moving average, indicating potential for further gains.
Shares of Broadcom (AVGO) have climbed nearly 12% in the past five days, including a 10% increase on Monday alone. This surge is linked to growing optimism surrounding Alphabet (GOOGL), Google’s parent company, and its recent AI advancements, particularly the Gemini 3 model. As a key supplier of AI processors for Alphabet, Broadcom stands to benefit from increased chip demand.
Market analysts recognize Broadcom‘s important role in providing tensor processing units (TPUs) for Alphabet‘s AI infrastructure. TPUs are specialized chips designed specifically for accelerating machine learning tasks. According to a client note from Melius Research, “Outside of the NVIDIA GPU for AI workloads, the TPU is the most proven AI chip out there – and now it has the most tangible momentum.” This partnership is a major source of revenue for Broadcom, as Google Cloud continues to develop its AI technologies.
On November 20, Raymond James gave Broadcom an “Outperform” rating and set a price target of $420. The firm highlighted the broader semiconductor sector’s gains driven by AI, mentioning companies like Nvidia (NVDA) and AMD (AMD) alongside Broadcom. In their commentary, they stated, “The AI secular theme has taken the wheel, and the strategy of trading the cycle in semis has moved to the back seat. Each of these companies is impressive in its own way.”
Currently, Broadcom shares trade near the top of their 52-week range and sit above their 200-day simple moving average. According to CNN, this positioning suggests the stock may have additional room to appreciate. Tactical traders who purchased during recent dips might consider securing gains as the price approaches record highs.
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