Broadcom's stock is rising. Here's why its new Google and Anthropic deals are so significant.

By Emily Bary

Expanded chip agreements 'put the spotlight back on Broadcom as a major winner' and could pave the way for earnings upside, analysts say

Broadcom's stock was up about 4% in Tuesday morning action.

Broadcom is showing its might in the world of artificial-intelligence chips - with two expanded deals that suggest the company could surpass its prior expectations for AI revenue.

Broadcom (AVGO) disclosed late Monday that it has struck a new five-year agreement to develop and supply Google's tensor processing units. Additionally, Broadcom and Google, a unit of Alphabet (GOOG) (GOOGL), reached an agreement around networking components to be used in Google's AI racks.

Broadcom also disclosed a separate agreement with Anthropic that marks an extension of their business relationship. Starting next year, the AI company will access about 3.5 gigawatts of TPU compute through Broadcom.

"The consumption of such expanded AI compute capacity by Anthropic is dependent on Anthropic's continued commercial success," Broadcom noted in a filing.

See more: Anthropic's meteoric rise shocked the market - but the AI crown remains up for grabs

That said, Anthropic hinted at some major financial progress in its own press release. The company is now clocking run-rate revenue in excess of $30 billion. For comparison, at the end of 2025, it had a revenue run rate of about $9 billion.

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Bernstein analyst Stacy Rasgon pointed out that Broadcom previously forecast about $100 billion in AI revenue for fiscal 2027. "We believe this number is looking increasingly light," he wrote, meaning the company could deliver upside relative to investor expectations. Every $10 billion or so in incremental revenue amounts to roughly $1 in incremental earnings per share, according to Rasgon's math. "The stock is looking increasingly attractive here," Rasgon added.

Broadcom shares were up more than 4% shortly after Tuesday's open - though they've lost 5% so far this year.

Read: This 'overlooked' AI stock is a new top pick at Morgan Stanley

The new deals "put the spotlight back on Broadcom as a major winner," D.A. Davidson analyst Gil Luria wrote in a note to clients.

While Broadcom is winning new business, it's not the only game in town, and the big AI companies are increasingly diversifying their supply arrangements as they look to amass as much compute as possible.

"We train and run Claude on a range of AI hardware - AWS Trainium, Google TPUs, and Nvidia GPUs - which means we can match workloads to the chips best suited for them," Anthropic said in its release. "This diversity of platforms translates to better performance and greater resilience for customers who depend on Claude for critical work."

-Emily Bary

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04-07-26 0941ET