In the world of generative artificial intelligence (AI), few companies generate as much buzz as Anthropic. For example, its Claude platform is often the leading platform for assisting coders, and its latest model, Mythos, couldn’t even be released to the general public due to its potential threat to cybersecurity. It’s at the top of the food chain right now, and any company partnering with Anthropic is often seen as a leader. If their equipment is good enough for Anthropic, the thinking goes, it’s likely about the best available.
Recently, Anthropic made an announcement regarding its usage of Tensor Processing Units (TPUs), which were created through a joint venture between Broadcom (AVGO +0.51%) and Alphabet (GOOG 1.47%) (GOOGL 1.54%). Both of these companies stand to benefit from increased TPU usage, and each looks like a phenomenal investment.
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Anthropic is deploying more of its workloads on next-generation computing units
Anthropic announced that starting in 2027, it will be using multiple gigawatts of computing power of next-generation TPUs. Long-term commitments like these help give investors clarity for what to expect from companies in the years ahead.
This partnership, alongside several others that Broadcom has announced, will help it continue to deliver impressive revenue growth. By the end of 2027, Broadcom expects its custom AI chip business to generate more than $100 billion annually. Its AI semiconductor division (which includes other products outside of custom AI chips) generated $8.4 billion in revenue last quarter (up 106% year over year). There’s a ton of growth ahead, and growing partnerships with AI leaders like Anthropic are a good sign for the future.
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Alphabet is recognizing TPU revenue through its Google Cloud division, and this segment is catching fire. Last quarter, its revenue rose 48% year over year. That’s rapid growth for a legacy company, and expanded TPU partnerships with Anthropic and others will lead to continued strong growth for this important segment within Alphabet.
Both of these stocks are fantastic investment options in the AI space. Instead of being in the leadership position like Nvidia, they are comfortably in the challenger role and only looking to take market share, which they appear to be doing. Anthropic will continue using Nvidia hardware as well, but Nvidia no longer has this massive AI growth segment to itself.
Still, I think a well-balanced approach of owning several of these companies is the best call for most AI investors.
Keithen Drury has positions in Alphabet, Broadcom, and Nvidia. The Motley Fool has positions in and recommends Alphabet, Broadcom, and Nvidia. The Motley Fool has a disclosure policy.
