Broadcom (AVGO) Stock: Jumps 11% as Google AI Partnership Drives New Rally

TLDR

• Broadcom stock surged 11.1% on Monday, marking its best day since April 9, as investors jumped back into AI-related tech stocks
• The rally connects to Alphabet’s growing AI success, with Broadcom designing and manufacturing Google’s tensor processing units (TPUs) for AI infrastructure
• Analysts see an “inflection point” for custom AI chips, with Google processing 1,300 trillion tokens monthly, up from 480 trillion in April 2025
• Wall Street analysts raised price targets to $475-$480, suggesting 39-41% potential upside from current levels
• Broadcom’s VMware business grew 17% year-over-year to $6.8 billion in Q3, providing stable recurring revenue alongside AI chip growth

Broadcom stock jumped 11.1% on Monday. The rally made it the S&P 500’s top performer as money flowed back into artificial intelligence stocks.

Broadcom Inc., AVGO

The chip designer closed out its best trading day in over seven months. Shares have now climbed 60% year to date.

The move mirrors gains in Alphabet stock, which rose more than 5%. The two companies are linked through a partnership that’s catching Wall Street’s attention.

Broadcom designs and manufactures Google’s tensor processing units. These custom AI chips power Google’s internal infrastructure and compete directly with Nvidia’s graphics processing units for AI work.

Google has been working with Broadcom on these custom chips since 2016. The partnership is now in its seventh generation of development.

Wall Street Raises Price Targets

Melius Research analyst Ben Reitzes bumped his price target from $415 to $475 last month. He kept his buy rating on the stock.

Jefferies analyst Blayne Curtis sees custom AI chips hitting an “inflection point.” He named Broadcom a top pick and raised his price target to $480.

Curtis pointed to Google’s surging processing demands. The company handled 1,300 trillion tokens in October, up from 480 trillion in April 2025.

Dan Ives from Wedbush Securities called Broadcom and Alphabet “the new AI plays the market is rediscovering.” He owns both stocks in his AI-focused ETF.

The Custom Chip Opportunity

Broadcom supplies high-performance chips to major cloud companies. The company has four confirmed hyperscale customers for custom AI chips, including Google and Meta.

These partnerships run deep. Designing custom accelerators requires multi-year engineering work and tight integration between companies.

The shift from training AI models to running them at scale creates new demand. Inference work happens billions of times daily for real users, creating sustained chip orders.

Broadcom’s networking technology adds another revenue stream. The company’s Tomahawk Ultra switches can connect up to 1,024 accelerators in a single rack.

VMware Adds Stability

The VMware business keeps growing while the AI story unfolds. Revenue in that segment hit $6.8 billion in Q3, up 17% year-over-year.

Broadcom is converting customers to subscription models. This shift turns one-time license sales into predictable recurring revenue.

The software business generates steady cash flow. That money can fund more AI research or go back to shareholders through buybacks and dividends.

Alphabet stock has jumped 21% over the past month. The gains came after Google launched its Gemini 3 AI model and announced a seventh-generation TPU called “Ironwood.”

Google also rolled out advances in AI image generation with Nano Banana Pro and a new agent platform called “Google Antigravity.” Analysts see Google processing 1,300 trillion tokens monthly, nearly triple the volume from six months earlier.

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