Broadcom Stock Jumps — Google’s $185 Billion AI Spending Plan Lifts Chip Shares

This article first appeared on GuruFocus.

Broadcom (AVGO) climbed about 4% on Thursday morning after Alphabet (NASDAQ:GOOGL) said it would lift capital spending to roughly $175 billion to $185 billion, a move that investors see as a major tailwind for custom AI chips and networking gear.

Jefferies kept a Buy rating and put a $500 price target on Broadcom, saying the firm could capture a dominant share of Google’s custom chip orders, roughly 85%90% of an estimated six million units in calendar 2027, which supports upside for AVGO, the bank wrote.

Analysts point to Broadcom’s strength across ASICs and networking, including ramps in next-generation switches and DSP gains that could outpace other segments this quarter. Wolfe and other shops have issued bullish notes in recent sessions.

TV commentator Jim Cramer called Broadcom a winner in this environment, though he suggested waiting for a pullback before entering. Market watchers also flagged a recent senior-notes offering and insider activity as items to monitor.

Nvidia (NVDA) and memory suppliers also rose on the news, underscoring a sector rotation into AI infrastructure plays as investors parse capex winners and losers.