What Happened?
Shares of fabless chip and software maker Broadcom (NASDAQ: AVGO) jumped 7.6% in the afternoon session after Wall Street digested the significant revenue potential from recent AI capital expenditure plans announced by key customer Google.
Google announced plans to spend between $175 billion and $185 billion on AI infrastructure in 2026, marking one of history's largest AI buildouts. Broadcom had secured $21 billion in orders from Google for its custom TPU AI accelerators. Broadcom itself had guided for its own AI revenue to reach $8.2 billion in the first quarter of 2026, which represented 100% growth from the previous year. In response to the developments, Wolfe Research upgraded the stock to Outperform, highlighting increased confidence in Google's program and Broadcom's role as a key supplier. Jefferies also reiterated its Buy rating, citing the company's strong position in AI and networking markets.
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What Is The Market Telling Us
Broadcom’s shares are very volatile and have had 23 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The previous big move we wrote about was 2 days ago when the stock dropped 4% on the news that uncertainty increased over when key companies can resume large-scale sales of high-end artificial-intelligence chips to China.
The U.S. government reportedly extended its review of export license applications for AI hardware, such as Nvidia's H200 chips, on national security grounds. This delay created uncertainty for chipmakers and reportedly led some Chinese customers to postpone orders until clearer guidance was issued. While there were earlier signals that some shipments could restart, the extended review process stalled progress, weighing on the stock of major exporters who saw China as a significant market. The situation highlighted the ongoing geopolitical tensions impacting the semiconductor industry's global supply chain.
Broadcom is down 4.1% since the beginning of the year, and at $333.28 per share, it is trading 19.3% below its 52-week high of $412.97 from December 2025. Investors who bought $1,000 worth of Broadcom’s shares 5 years ago would now be looking at an investment worth $7,051.
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