After Broadcom (NASDAQ: AVGO) slipped below $300 per share in late March, multiple key developments have allowed the stock to stage a significant recovery to around $350.
The first was de-escalation with Iran. A Pakistan-brokered two-week ceasefire, announced April 7, lifted indexes broadly.
With a beta of 1.24, Broadcom is more volatile than the broad market, and shares of the chip giant benefited disproportionately from the announcement. However, much of the stock's recent jump came as a result of another announcement.
On April 7, shares rose more than 6% as Broadcom, Google-parent company Alphabet (NASDAQ: GOOGL), and Anthropic revealed an expansion of their partnerships.
This provided much-needed evidence that the generally downtrodden sentiment around Broadcom stock lacks justification.
Broadcom and Google Re-up Long-Term TPU Partnership
Google is Broadcom’s longest-standing and largest customer for custom artificial intelligence (AI) chips. Together, the two companies have developed multiple generations of Tensor Processing Units (TPUs)—the companies' answer to NVIDIA’s (NASDAQ: NVDA) graphics processing units (GPUs), which have dominated AI buildout since their inception.
Still, it is important to note that TPUs and GPUs are not necessarily direct competitors. In fact, they often act as complements to one another, with each focusing on specific workloads for which they are best suited.
In a recently released regulatory filing, Broadcom indicated that its relationship with Google will continue for years to come. The company noted that it has entered "into a Long Term Agreement for Broadcom to develop and supply" Google's future generations of TPUs. Thus, the two companies are renewing their TPU relationship over multiple future generations of these chips, demonstrating that Broadcom's most important customer will remain in the fold for the foreseeable future.
Additionally, the two firms have entered into a “Supply Assurance Agreement for Broadcom to supply networking and other components to be used in Google’s next-generation AI racks through up to 2031.” Networking components are separate products from TPUs; they essentially allow TPUs to connect and communicate with each other. With networking equipment accounting for one-third of Broadcom’s AI revenue last quarter, this part of the announcement is significant as well.
Overall, Broadcom has locked in multi-year agreements with its largest customer in both TPUs and networking, adding substantial long-term visibility to its outlook.
Broadcom Confirms Partnership With Anthropic Amid Rapid Growth
Google has traditionally used TPUs for internal purposes, including training and deploying its general-purpose AI models, as well as optimizing business lines like YouTube and Google Ads. However, over recent months, it has become clear that Google will also extend TPU usage to third-party customers.
The most notable customer included in this is Anthropic, the company behind Claude, a family of large language models considered by some to be the best AI assistant available. Now, Broadcom, Google, and Anthropic have expanded their collaboration.
Beginning in 2027, Anthropic will access approximately 3.5 gigawatts (GW) of TPU-based AI compute capacity through Broadcom. GWs are a commonly used metric to describe the size of data center deployments. Bernstein analyst Stacy Rasgon recently estimated that Broadcom brings in around $20 billion in revenue per GW.
This statement adds some important details compared to what was previously known. In its last earnings call, Broadcom said it expects TPU demand from Anthropic to exceed 3 GW. The most recent announcement provides a greater level of confidence around these past claims. Broadcom previously said Anthropic’s demand was "expected" to exceed 3 GW. Now, it says Anthropic "will" access over 3 GW while providing a specific figure of 3.5 GW.
Additionally, Broadcom says that the 3.5 GWs are part of the multiple GW capacity Anthropic has committed to, strongly suggesting that those GWs are just the beginning of a larger, longer-term commitment.
Still, Broadcom added a conservative statement to hedge against potential risks, saying the expansion with Anthropic "is dependent on Anthropic's continued commercial success." Fortunately, Anthropic is growing at a breakneck pace and potentially eyeing an IPO this year.
From the end of 2025 to early April, Anthropic says its annual revenue run rate has increased from $9 billion to $30 billion. In other words, the company’s run rate has astonishingly tripled in just three months. This provides a significant level of confidence that Anthropic's commercial success will, in fact, continue.
Broadcom, Google and Anthropic Signal That AI Growth Is Here to Stay
Overall, Broadcom continues to lock in long-term partnerships with some of the biggest players in the AI race. While markets have fretted over fears of an AI bubble, which in turn put downward pressure on Broadcom, these companies clearly do not agree.
Anthropic's remarkable growth is one of the clearest metrics that pushes back on this idea. It shows that AI demand is real, not theoretical, and is rapidly increasing. Meanwhile, Broadcom is setting itself up for long-term success through its partnerships with leaders in this space.
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The article "Broadcom Locks in Multi-Year AI Wins With Google and Anthropic" first appeared on MarketBeat.
