Their current stock price is pricing in these contracts, which have already been announced but have not been fulfilled (or booked as revenue) yet. So Broadcom's 2025 revenue was 63B; note that this is already up almost double from its 2023 revenue of 35B, largely on AI contracts. If Anthropic spends another $32B in 2026, that's in addition to their declared revenue; investors expect they'll be making $100B+ in 2026. Broadcom's operating margins are pretty good, so a lot of this flows through to the shareholders as earnings, and so investors are valuing it on the assumption that these contracts result in tangible cash flow.
If the AI companies go tits-up, that introduces counterparty risk, the revenue doesn't materialize as cash, and suddenly their earnings take a nose-dive. If they've staffed up significantly to design and sell these AI accelerators and suddenly there's no market, they could be in a lot of hurt.
BRCM and Marvell are both the actual designers of many of the “we designed our own ai chip” chips that so many companies have been announcing.
Broadcom is also a major supplier of the networking chips that the hyperscalers use. Clusters are moving away from infiniband and nobody is particularly impressed by Spectrum.
I'm sure there are others here that are experts on this topic, but my 2 cents on this is that Broadcom specialise in custom / specialised AI chips, and their collaboration with Google to manufacture the TPUs is a pretty solid revenue moat over the next several years.
Their current stock price is pricing in these contracts, which have already been announced but have not been fulfilled (or booked as revenue) yet. So Broadcom's 2025 revenue was 63B; note that this is already up almost double from its 2023 revenue of 35B, largely on AI contracts. If Anthropic spends another $32B in 2026, that's in addition to their declared revenue; investors expect they'll be making $100B+ in 2026. Broadcom's operating margins are pretty good, so a lot of this flows through to the shareholders as earnings, and so investors are valuing it on the assumption that these contracts result in tangible cash flow.
If the AI companies go tits-up, that introduces counterparty risk, the revenue doesn't materialize as cash, and suddenly their earnings take a nose-dive. If they've staffed up significantly to design and sell these AI accelerators and suddenly there's no market, they could be in a lot of hurt.
AI aura.
BRCM and Marvell are both the actual designers of many of the “we designed our own ai chip” chips that so many companies have been announcing.
Broadcom is also a major supplier of the networking chips that the hyperscalers use. Clusters are moving away from infiniband and nobody is particularly impressed by Spectrum.
I'm sure there are others here that are experts on this topic, but my 2 cents on this is that Broadcom specialise in custom / specialised AI chips, and their collaboration with Google to manufacture the TPUs is a pretty solid revenue moat over the next several years.
AI focused investments and patent trolling.
Forward P/E.