The Real Winner of Google’s $135 Billion Chip Forecast: Broadcom Michael Douglass Mon, November 9, 2026 at 3:45 PM EST 6 min read GOOGM +0.72% AVGO +8.85% 2454.TW +9.88% NVDA -4.24% Explore stocks on Coinbase Trading disclosure Trading disclosure The above button links to Coinbase. Yahoo Finance is not a broker-dealer or investment adviser and does not offer securities or cryptocurrencies for sale or facilitate trading. Coinbase pays us for certain activity generated through this link. Prices displayed are informational.
Google unveiled two new versions of its TPUs today, and Bloomberg Intelligence expects TPU sales to grow from about $12 billion this year to more than $135 billion by 2028.
Broadcom helps design the TPUs and has a deal to supply them and their networking through as late as 2031, so it has far more riding on that forecast than Alphabet does.
Broadcom's AI semiconductor revenue was $16.7 billion in its latest quarter, but management expects Google to use other suppliers too, and MediaTek is building a version of Google's next TPU.
Broadcom rose today along with other Nvidia rivals, and its forward P/E is still well below its 5-year average.
Alphabet (GOOG) just launched two new versions of its TPUs, and Bloomberg Intelligence expects sales of the chips to top $135 billion by 2028.
The company with the most to gain from that is Broadcom (AVGO:NASDAQ). It helps design the TPUs and has a deal to supply them and their networking through as late as 2031.
Broadcom shares rose 10% today, but that had nothing to do with Google. Chip stocks bounced after Nvidia (NVDA:NASDAQ)'s board said it would investigate CEO Jensen Huang's relationship with an alleged Chinese spy, and coverage said the damage was limited to Nvidia, which fell 5%. The bounce came after Broadcom dropped 15% in a week, so I don't think Broadcom's price reflects Google's chip plans just yet.
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The new TPU 8tx and TPU 8i Max join the 8t and 8i that Google unveiled in April, and both ship next year. The 8tx encrypts data at the chip level for government agencies and regulated industries and works with processors from AMD. The 8i Max puts two TPUs in one package for AI work that needs long context windows. That's four TPU systems in one year, a first for Google, whose TPUs already rank second only to Nvidia's chips in compute built.
Google chip chief Amin Vahdat told Bloomberg that "the future is going to be about specialization, and the upsides for specialization continue to be significant."
Then there's the forecast. Bloomberg Intelligence expects TPU sales, including related software and hardware, to climb from an estimated $12 billion this year to more than $135 billion by 2028. That doesn't count chips customers rent through Google Cloud. It's more than 11-fold growth in two years. By comparison, Nvidia's data center business grew about eightfold in the first two years of the AI boom, from $15 billion in fiscal 2023 to $115 billion in fiscal 2025.
Broadcom has worked on the TPU with Google for more than a decade, helping with the design and coordinating production. In an April 6 filing, Broadcom disclosed a deal to supply Google with TPUs and networking through as late as 2031. So when Google builds more TPUs, Broadcom sells more chips and more networking gear.
That's where Broadcom's growth is coming from. Its AI semiconductor revenue was $16.7 billion in the quarter ended Aug. 2, up 221% from a year earlier. Management guides $58 billion for fiscal 2026, about $115 billion for fiscal 2027 (the year ending next fall) and $230 billion for fiscal 2028. Analysts' revenue estimates climb just as steeply:
If management hits its AI guide, AI chips would be about two-thirds of the $175 billion in revenue analysts expect for fiscal 2027, and more than four-fifths of the $275 billion they expect for fiscal 2028.
For Alphabet, the TPUs in its own data centers are a cost. They're part of a capital budget that has grown every quarter for two years, more than doubling to $51.4 billion in the quarter ended Sept. 30 from $24.0 billion a year earlier:
TPU sales would add to Alphabet's revenue, but they'd be one line in a company that also runs Search, YouTube and Google Cloud. For Broadcom, every TPU it supplies is revenue from its fastest-growing business, whether Google keeps the chip or sells it.
Of course, Broadcom won't collect all $135 billion. Management expects Google to use other suppliers too, and MediaTek is building a version of Google's next TPU. But the deal runs as late as 2031 and covers networking as well as the chips. Even a partial share of that growth would be a lot of money for Broadcom.
Broadcom traded at about 17x forward earnings at Friday's close. That's well below its 5-year average of 24x and its high of 49x in December 2025:
Today's jump pushes the multiple up a little, but it's still well below the average. The way I see it, Google's chip plans matter far more to Broadcom's next two years than to Alphabet's, and at this multiple you're getting that growth at a discount to the stock's own history.
Of course, Bloomberg Intelligence's number is still a forecast, and Google has to sell all those chips first. Broadcom reports its fourth quarter on Dec. 9. Whether management stands by its fiscal 2027 AI outlook will show how much of Google's plan is coming its way.
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