Broadcom has cemented its position as the dominant custom silicon and AI networking partner across the three largest US hyperscalers in the space of a single week. A long-term agreement with Google for next-generation TPUs, an expanded collaboration with Anthropic for TPU-based AI compute capacity, and a multi-year strategic partnership with Meta for custom MTIA chips collectively represent a step change in revenue visibility. With a Buy rating and a 12-month price target of US$480, we think Broadcom is one of the best-positioned companies in the AI infrastructure buildout and that the market has not yet fully priced the scale of these commitments.
Research published 14 April 2026. Price target and upside based on prices at time of publication.
About Broadcom
Broadcom Inc. is a global technology company headquartered in Palo Alto, California, with a market capitalisation of approximately US$1 trillion. The company designs, develops and supplies semiconductor and infrastructure software solutions across two main segments: semiconductor solutions (custom AI accelerators, networking chips, broadband, storage) and infrastructure software (following the 2023 acquisition of VMware). Broadcom’s customers include the world’s largest cloud and hyperscale data centre operators, enterprise IT departments, and telecommunications providers. The company trades on the NASDAQ under the ticker AVGO. For more detail, see Broadcom’s investor relations page and its most recent SEC filings.
The Google and Anthropic Agreements
On April 6, Broadcom filed an 8-K announcing a Long Term Agreement with Google to develop and supply future generations of Google’s TPUs (Tensor Processing Units), alongside a Supply Assurance Agreement to provide networking and other components for Google’s AI racks through 2031. At the same time, Google and Anthropic expanded their existing strategic collaboration, with Anthropic set to access at least 3.5 GW of TPU-based AI compute capacity beginning in 2027. That is a massive commitment and speaks to the trajectory of AI training and inference demand over the next several years.
The strategic significance here goes beyond the dollar value of the contracts. Google and Anthropic are leading the market on a broad spectrum of LLM benchmarks, and a supply assurance agreement of this duration reinforces Broadcom’s networking capabilities as genuinely differentiated rather than interchangeable. It also reduces the competitive risk that has weighed on investor sentiment around the custom compute franchise, because a customer does not lock in a supplier through 2031 if it is planning to bring the capability in-house.
The Meta Partnership
A week later, on April 14, Broadcom announced a multi-year, multi-generation strategic partnership with Meta to support Meta’s MTIA custom compute chips. The supply chain fulfillment plans extend to 2029, and the initial commitment already exceeds 1 GW, representing the first phase of what is expected to be a sustained, multi-gigawatt rollout between the two companies.
This deal is broader than just chip supply. Broadcom is delivering networking solutions to address Meta’s scale-up, scale-out and scale-across requirements, and the collaboration extends into system-level optimisation and forward-looking R&D. Broadcom CEO Hock Tan is transitioning off Meta’s Board of Directors and into an advisor role, where he will provide guidance on Meta’s custom silicon roadmap. That kind of structural involvement suggests this is not a transactional supplier relationship but a deeply embedded technology partnership.
Revenue Visibility and the XPU Growth Trajectory
The combined effect of these three partnerships is substantial. Google and Anthropic alone are expected to contribute US$64.5 billion and US$75.7 billion in AI XPU revenues for Broadcom in FY27 and FY28 respectively, representing approximately 70% of Broadcom’s total AI XPU revenues in those years. Adding Meta on top of that gives Broadcom exposure to the three hyperscalers spending the most aggressively on custom silicon and AI infrastructure globally.
Total revenue is forecast at US$180.7 billion for FY27 and US$224.0 billion for FY28, with EBITDA of US$114.0 billion and US$143.1 billion respectively. EBITDA margins are expected to expand from around 60% to approximately 64% over that period as the higher-margin AI XPU revenues scale. EPS is forecast at US$19.18 for FY27 and US$24.39 for FY28, which puts Broadcom’s estimates roughly 14% above Street consensus (Visible Alpha Consensus Data).
Valuation
The 12-month price target of US$480 is based on 30 times a normalised EPS estimate of approximately US$16. At the last close of US$380.78, this implies 26% upside to the target. On a forward P/E basis, the stock trades at around 19.9 times FY27 earnings and 15.6 times FY28 earnings, which looks reasonable for a company growing revenue at close to 25% per annum with expanding margins and multi-year contract visibility from the largest AI spenders on the planet.
Key Risks
The main downside risks to watch are a slowdown in AI infrastructure spending, which would directly affect the XPU revenue trajectory. Share loss in the custom compute franchise is a perennial concern, though the long-term nature of the Google, Anthropic and Meta agreements significantly mitigates this. Persistent inventory digestion in non-AI segments remains a drag on near-term growth, and increased competition in VMware’s enterprise software market could weigh on the infrastructure software segment. The stock has also run hard, up nearly 114% over the past 12 months, so any wobble in the AI capex narrative could trigger a pullback.
Our View
We think Broadcom’s position in the custom silicon ecosystem is now genuinely difficult to replicate. Having all three of Google, Anthropic and Meta locked into multi-year supply and development agreements is as close to a structural moat as you can get in a market where the technology is still evolving rapidly. The networking piece is equally important, because as AI clusters scale from hundreds of megawatts to multiple gigawatts, the networking architecture becomes a binding constraint, and Broadcom is the partner of choice for solving that problem.
The revenue visibility here is exceptional. The combination of US$64.5 billion from Google and Anthropic alone in FY27, plus Meta’s multi-gigawatt commitment, gives Broadcom a forward order book that most semiconductor companies can only dream of. At 30 times normalised earnings with a US$480 price target, we think there is still meaningful upside for investors willing to look through near-term volatility in the broader tech sector.
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