PALO ALTO, California, April 28, 2026, 05:08 PDT
Broadcom Inc.’s AI-fueled rally hit a snag ahead of Tuesday’s U.S. open, with chip stocks losing ground amid investor anxieties that AI spending could be outpacing actual demand. Shares of Broadcom traded lower in the premarket, though the company’s valuation hovered near $2 trillion following its recent surge.
The clock’s ticking as Alphabet, Microsoft, Meta and Amazon prepare to deliver their results this week. Investors want clear evidence that all the billions poured into artificial intelligence data centers are fueling sustainable growth in cloud and advertising. Reuters reported that combined, the four giants are set to lay out roughly $600 billion on AI this year.
Broadcom’s capital outlays are front and center. The company is building custom AI chips and networking gear for major data centers, right as the industry looks to ease up on its Nvidia habit. Earlier this month, Broadcom announced a long-term agreement with Google—supplying next-generation custom AI chips and related hardware all the way through 2031. There’s also a separate deal: about 3.5 gigawatts of AI compute capacity lined up for Anthropic, starting 2027.
Broadcom hit a record high on April 22, pushing its market cap above $2 trillion and landing it as the sixth most valuable company in the U.S., per a Motley Fool piece out on Yahoo Finance. That article pointed to recent Google developments as further proof of Broadcom’s importance in AI networking and custom chips—beyond its established foothold in semiconductors and software.
Broadcom landed the spotlight as Investor’s Business Daily’s Stock of the Day, the publication noted, with shares sticking close to a technical buy area. According to IBD, the stock cleared a cup base buy point of 414.61 back on April 22, making its way into a 5% buy zone that tops out at 435.34. Broadcom finished Monday’s session at 418.20, off 1.1%. JPMorgan’s Harlan Sur called the chipmaker a “top pick,” and both Mizuho and Morgan Stanley stuck with their outperform and overweight ratings, respectively, IBD said. Investors
The financial base here isn’t just about momentum. Broadcom posted $19.31 billion in fiscal Q1 revenue, a 29% jump from last year, and net income on a GAAP basis landed at $7.35 billion. CEO Hock Tan pointed to “Q1 AI revenue of $8.4 billion,” more than doubling—up 106% year-over-year. Looking ahead, Broadcom is projecting second-quarter revenue near $22 billion, with AI semiconductor sales guiding to $10.7 billion. Broadcom Inc.
Google rolled out its latest chip roadmap, putting a spotlight on its AI hardware efforts. Two new eighth-generation Tensor Processing Units made their debut: the TPU 8t, targeted at model training, and the TPU 8i, designed for inference—essentially, running models for tasks like answering queries. According to Google, the TPU 8i delivers an 80% jump in performance per dollar over the last generation. That’s a strong signal of why cloud giants keep pushing into custom silicon.
Broadcom is pushing for more attention on its networking business. On April 22, it rolled out a deeper partnership with Google Cloud, focused on Cloud Network Insights—a service built on Broadcom’s AppNeta tech. The tool is aimed at helping users track application and network performance across cloud, hybrid, and AI-agent setups. “End-to-end insights” for spotting network slowdowns faster, promised Google Cloud’s Rob Enns. GlobeNewswire
Some analysts argue Broadcom shouldn’t just be lumped in as another Nvidia competitor. On Monday, Seeking Alpha’s Marc Gerstein described Broadcom as a growth name within the AI ecosystem, highlighting its edge in customization and networking, not in battling Nvidia for every GPU job. It’s not an “Nvidia killer,” Gerstein wrote. Seeking Alpha
The landscape remains patchy. Anthropic said it relies on AWS Trainium, Google TPUs, and Nvidia GPUs to train and deploy Claude—so Broadcom’s slice is sizable, but far from locked up. Anthropic CFO Krishna Rao described the Google-Broadcom agreement as the firm’s “most significant compute commitment to date.” Anthropic
But the risk just got real. Reuters said Tuesday that shares of Oracle and CoreWeave slid in premarket trading, after the Wall Street Journal reported OpenAI missed targets for new users and revenue. That’s fueling doubts about whether OpenAI can pay for future computing contracts unless revenue picks up. Broadcom? If the pace of AI infrastructure orders slows down, that’s a problem for a stock already reflecting aggressive growth expectations.
The real question now: can Big Tech’s earnings deliver evidence of demand strong enough to justify this AI expansion? Broadcom’s got the contracts, the know-how, and rising revenues. What’s missing? Investors are waiting to see if those chip buyers keep paying up.
