Overview
- Alphabet said it expects to spend up to $185 billion on capital expenditures in 2026, nearly double last year, with a focus on AI data centers.
- Broadcom shares rose about 6% in after-hours trading on the guidance, while Nvidia gained roughly 2% and memory names also advanced.
- Broadcom co-develops Google’s Tensor Processing Units and is expanding a custom-chip business for hyperscalers, with Google and Anthropic publicly named.
- Jefferies reiterated a Buy rating with a $500 price target and projected Broadcom could capture about 85% to 90% of Google’s roughly 6 million chip units in 2027.
- Wolfe Research upgraded Broadcom to Outperform and Wells Fargo to Overweight, and RBC initiated at Sector Perform, as analysts flagged both opportunity and concentration risks tied to hyperscaler custom chips.