Broadcom Inc. (AVGO) stock jumped nearly 6% on Wednesday after a bullish analyst note from JPMorgan eased concerns about the company's long-term artificial intelligence chip business and renewed investor interest in AI-related semiconductor stocks.

The broader tech sector also helped. The Technology Select Sector SPDR Fund (XLK) gained 1.21%, while the Nasdaq Composite rose 0.40%. The S&P 500 was little changed.

Broadcom AI Growth Outlook Remains Intact

Broadcom is still well-positioned to ride the AI infrastructure wave, despite recent market chatter that Alphabet Inc.'s (GOOGL) next-generation TPU v9 chip program might be delayed or canceled. JPMorgan says that's not the case.

The brokerage reiterated its Overweight rating on Broadcom and said its latest research indicates Google's TPU v9 2-nanometer ASIC program remains on track for volume production in calendar 2028, with no delays or cancellations.

JPMorgan Dismisses TPU Delay Concerns

Analyst Harlan Sur said Broadcom began intellectual property design work on the TPU v9 chip in the first half of last year and started system-on-chip design in the second half. He described the project as one of Broadcom's highest-priority programs and said early work has already begun on the next-generation TPU v10.

JPMorgan added that Google's internal chip development team still trails Broadcom by more than 18 months in advanced chip and packaging capabilities. While Google is developing its own custom silicon, the bank believes Broadcom retains a significant competitive advantage that will take years to overcome.

AI Revenue Visibility Extends Through 2031

The bank also pointed to the five-year agreement signed between Google and Broadcom in March, which it said secures Broadcom's role across the next four TPU generations — v8, v9, v10 and v11. JPMorgan believes the agreement includes commitments for increasing annual TPU revenue through 2031, improving the company's long-term AI revenue visibility.

Broadcom's broader AI pipeline also remains strong, according to JPMorgan. The firm said the company is working on custom AI chip programs with six frontier AI model developers, including Google, OpenAI, Anthropic and Meta Platforms (META).

Based on those opportunities, JPMorgan expects Broadcom's AI revenue to increase by two to 2.5 times in 2027 before doubling again in 2028. The firm said investors continue to underestimate Broadcom's leadership in custom AI chip design, advanced packaging and execution.

Broadcom Price Action

AVGO Price Action: Broadcom shares were up 5.40% at $397.06 at the time of publication on Wednesday, according to market data.