So, why is Broadcom Inc. (AVGO) stock popping on a Friday? It turns out designing the brains for other people's AI ambitions is a pretty good business.
Shares were up about 5% after news broke of a big, long-term AI infrastructure deal between Alphabet Inc. (GOOG) (that's Google) and Anthropic, the company behind the Claude AI models. Broadcom's role? They're the ones who design Google's custom AI chips, called Tensor Processing Units (TPUs). This new partnership aims to lock down multiple gigawatts of next-generation TPU capacity to power Anthropic's models. In plain English, that's a lot of computing power, and Broadcom gets to build the engines.
The broader market was mixed Friday, with the Nasdaq up a quarter of a percent and the S&P 500 down slightly. But Broadcom clearly had its own catalyst.
The Fuel Behind The Fire: A $30 Billion AI Juggernaut
This isn't just a story about hardware contracts. The deal gets its rocket fuel from the astonishing growth of Anthropic itself. The AI company recently reported its annualized revenue run rate has soared past $30 billion. Let that sink in. That's up from about $9 billion at the end of 2025. We're talking about a company that has more than tripled its revenue pace in a matter of months.
When your customer is growing that fast and needs a massive, secure supply of the most advanced AI chips on the planet to keep up, you want to be the company designing those chips. That's the position Broadcom finds itself in with this Google-Anthropic partnership. The deal is also framed as a move to bolster U.S. AI infrastructure, which adds a layer of strategic importance beyond just commerce.
More Than Just Silicon: Broadcom's Software Play
While the AI chip design work drives the headlines and the stock price, Broadcom isn't putting all its eggs in the hardware basket. The company is also pushing into software, recently launching something called the Arcot Smart Ruleset.
This is a machine learning engine built to sniff out e-commerce fraud. Matt Cooke, a vice president at Broadcom, explained its value: "Automated fraud detection is currently a multi-million dollar differentiator for top issuers." So, in one part of the business, Broadcom is helping build the future of AI; in another, it's using AI to help banks and retailers not get ripped off. It's a nice diversification story.
Supply Chain Jitters And The In-House Question
The timing of this deal is interesting. It comes as Anthropic is reportedly evaluating developing its own AI chips in-house. Why? To combat the global shortages and dependencies that come with relying on external suppliers like Google and Amazon.com, Inc. (AMZN).
This long-term agreement with Google (and by extension, Broadcom) could be seen as a way to secure a reliable pipeline of top-tier chips while Anthropic figures out its own silicon ambitions. For Broadcom, it locks in a major, high-growth customer for its design services for the foreseeable future.
What The Charts Are Saying
Let's look at the numbers. At around $372, Broadcom is trading:
- 15.8% above its 20-day simple moving average.
- 8.9% above its 100-day simple moving average.
The stock has had a monster run, up about 115% over the last 12 months. It's sitting much closer to the top of its 52-week range ($157.51 to $414.61) than the bottom.
Traders are watching a few key levels:
- Key Resistance: $414.50 (that 52-week high is just overhead)
- Key Support: $308.50
According to market data, Broadcom shares were up 4.97% at $372.56 at the time of publication on Friday.
The story here is simple: AI is generating insane amounts of revenue for companies like Anthropic, and that demand flows directly down the supply chain to the firms building the infrastructure. Right now, Broadcom has a prime seat at that table.
