Alphabet Inc. (GOOGL)'s Google has found a way to pack twice the computing power into the same data center footprint, just as AI workloads become more demanding. The upgrade could have implications well beyond Google's cloud business: JPMorgan says the new design reinforces Broadcom's position in Google's most advanced AI chip programs, with another major upgrade already on the horizon.

Google's New TPU Doubles Computing Power Per Rack

Google announced two additions to its eighth-generation Tensor Processing Unit (TPU) lineup on Monday: TPU 8i Max, designed for massive AI context windows, and TPU 8tx, built for secure and confidential computing.

The more significant development for Broadcom is the TPU 8i Max. Google combines two TPU 8i chips into a single package, doubling computing power, on-chip memory and high-bandwidth memory (HBM) bandwidth while retaining the existing rack footprint.

That matters as AI systems increasingly handle longer conversations, complex coding tasks and multiple autonomous agents working together. These workloads require processors to access much larger amounts of information without slowing down. By packing more computing capacity into existing infrastructure, Google can increase performance without proportionately expanding its physical data center footprint.

Google said its eighth-generation TPU family now includes four systems, each targeting a different part of the AI lifecycle, from large-scale model training to real-time reasoning and confidential computing.

JPMorgan Says Broadcom Remains Central to Google's AI Roadmap

For Broadcom Inc. (AVGO), however, the announcement offers something more important than another Google chip launch: validation of its custom silicon opportunity.

JPMorgan analyst Harlan Sur said the new configurations closely match the Broadcom TPU roadmap JPMorgan outlined in September. Based on architectural details released by Google, Sur believes the TPU 8i Max is consistent with Broadcom's 3-nanometer chip program.

The distinction is important because Google did not identify Broadcom as the supplier in its announcement. JPMorgan's assessment is based on its own research and industry checks.

Sur expects the TPU 8i Max to begin ramping in the second half of 2027. The next major milestone could be even more consequential: Google's next-generation 2-nanometer TPU, designated v9.5 or v10, remains on track for production in mid-2028, according to JPMorgan.

The planned design is considerably more ambitious, featuring eight compute dies, eight SRAM dies, 16 high-bandwidth memory stacks and 400G SerDes input/output connectivity.

What Broadcom Investors Should Watch Next

JPMorgan reiterated its Overweight rating on Broadcom, arguing that the latest development reinforces its conviction that the chipmaker remains central to Google's most strategic, high-performance TPU programs.

Sur also sees no gaps in Broadcom's TPU roadmap and expects no slowdown in revenue growth through calendar 2031.

For investors, the bigger question is how much of Google's expanding AI infrastructure spending Broadcom can capture as custom chips become increasingly important alongside Nvidia's GPUs.

The 2027 ramp and 2028 transition to 2-nanometer designs will be important milestones to watch.

Broadcom Stock Is Rebounding From a 52-Week Low

Broadcom shares hit a 52-week low of $289.77 on Nov. 6 before jumping about 9% on Monday as chip stocks rebounded. At $316.75 in premarket trading Tuesday, the stock was about 9% above that low but still down about 8% year to date and about 36% below its 52-week high of $495, set June 3.

The shares remain below their 20-, 50-, 100- and 200-day simple moving averages, and the relative strength index of about 45 is in neutral territory.

Recent analyst calls have leaned bullish. DA Davidson analyst Gil Luria upgraded Broadcom to Buy from Neutral on Oct. 27 and raised the price target to $400 from $350, while Rosenblatt analyst Sajal Dogra maintained a Buy rating and a $600 target the same day. Tigress Financial analyst Ivan Feinseth initiated coverage with a Buy rating and a $600 target on Oct. 22. Broadcom is expected to report fiscal fourth-quarter results on Dec. 9.

AVGO Price Action: Broadcom shares were down 0.85% at $316.75 in premarket trading Tuesday, according to market data.