Broadcom’s Largest AI Customer Is Fleeing to MediaTek. AVGO Stock Is Still a Buy.

Broadcom (AVGO) has seen a slowdown in its momentum in the past few months, and Alphabet's (GOOG) (GOOGL) Google is partly to blame. Google is diversifying away from the big-name AI chip companies to avoid paying high margins and also to increase its own self-sufficiency.

Thus, Google’s next data center inference chip, TPUv9 "Triggerfish," will likely be co-designed with MediaTek instead of Broadcom. Per Wedbush, Broadcom's share of Google's TPU silicon could slide from 95% this year to 65% in just two years. This will have major implications for Broadcom, since less and less of Google's AI spending will reach downstream into Broadcom's income statement.