What Happened?
Shares of fabless chip and software maker Broadcom (NASDAQ: AVGO) jumped 9% in the afternoon session after reports highlighted how Alphabet is using Tensor Processing Units (TPUs) co-designed and supplied by Broadcom, to outperform rivals following the release of its Gemini 3 artificial intelligence (AI) model.
Consequently, the positive review and surge in adoption following the release of Gemini 3, and the expansion of Google Cloud via the new NATO contract could necessitate a massive scaling of infrastructure that relies heavily on Broadcom's bespoke AI accelerators and high-speed Ethernet networking. This dynamic ensures that as Google reduces dependence on external GPU suppliers like Nvidia, Broadcom captures a significant share of the capital expenditure, cementing its status as the essential engine room of the generative AI boom.
Also, positive analyst sentiment and a strong outlook for artificial intelligence (AI) related demand are contributing to the improved sentiment. HSBC raised its price target on the company to $535 from $400 while keeping a "Buy" rating. In a similar move, Raymond James assigned an "Outperform" rating to the stock, noting that AI demand has reshaped the semiconductor sector.
Is now the time to buy Broadcom? Access our full analysis report here.
What Is The Market Telling Us
Broadcom’s shares are very volatile and have had 26 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 5 days ago when the stock gained 2.1% on the news that the company announced plans to expand its strategic partnership with NEC Corporation to drive modern private cloud adoption. Under the agreement, the two companies planned to use Broadcom's VMware Cloud Foundation (VCF) to help customers modernize their own private cloud systems. NEC intended to leverage the skills and expertise gained from implementing VCF in its own IT systems to assist other clients. The collaboration aimed to help customers ensure security and accelerate innovation.
Broadcom is up 61.1% since the beginning of the year, and at $373.75 per share, it is trading close to its 52-week high of $385.98 from October 2025. Investors who bought $1,000 worth of Broadcom’s shares 5 years ago would now be looking at an investment worth $9,529.
Microsoft, Alphabet, Coca-Cola, Monster Beverage—all began as under-the-radar growth stories riding a massive trend. We’ve identified the next one: a profitable AI semiconductor play Wall Street is still overlooking.Go here for access to our full report.
