If you've been worried that Broadcom's AI gravy train might be slowing down, JPMorgan has some reassuring news: the train is not only on track, it's picking up speed.
Analyst Harlan Sur reiterated an Overweight rating on Broadcom Inc. (AVGO) on Thursday, and the firm's latest research suggests fiscal 2026 AI revenue could top $56 billion. That's a jump of more than 180% from the prior year. And if you think that's impressive, JPMorgan expects AI revenue to grow another two to 2.5 times in fiscal 2027. So, yeah, the growth story is very much alive.
Google TPU Roadmap: Intact and Advancing
There's been chatter about potential hiccups in Broadcom's partnership with Google, but JPMorgan isn't buying it. The firm says Broadcom has already started ramping Google's next-generation 3-nanometer TPU v8i ASIC, with the 2-nanometer TPU v9 expected to ramp in early 2028.
Remember that five-year agreement Google and Broadcom signed back in April? It's still in effect, according to JPMorgan. That deal locks in Broadcom's role across four TPU generations, from v8 through v11, and includes commitments for rising annual TPU-related revenue through 2031. So much for the rumors of delays or cancellations—JPMorgan's research doesn't match those reports. In fact, Broadcom has already started early intellectual property design work for the subsequent TPU v10 generation.
Networking Demand: Supply Can't Keep Up
It's not just custom chips driving the optimism. JPMorgan also highlights strong demand for Broadcom's AI networking products. The analysts say demand for Tomahawk 5 and the next-gen Tomahawk 6 is exceeding Broadcom's supply capacity for this year and next. When your customers want more than you can make, that's a good problem to have.
Beyond Google, Broadcom's custom AI chip programs are humming along with a who's who of tech giants: Meta Platforms Inc. (META), OpenAI, Anthropic, ByteDance, Alibaba Group Holding Limited (BABA), SoftBank-backed Arm Holdings plc (ARM), Apple Inc. (AAPL), and SambaNova Systems. These programs are in various stages of design, ramp, or production, according to the report.
JPMorgan thinks investors are still underestimating Broadcom's position in custom AI silicon. The firm points out that Broadcom has helped Google bring 14 advanced chip designs to market over the past 12 years—a track record that speaks for itself. With that kind of history, the bullish stance seems well-founded.
Price Action
Broadcom shares were up 0.23% at $363.32 at the time of publication on Thursday, according to market data. A modest move, but with JPMorgan's confidence and the AI tailwinds, investors might be watching for more.
