Broadcom shares jump before the bell as chipmaker agrees Google and Anthropic deals

Broadcom's shares experienced a notable increase of 3.7% in premarket trading on Tuesday, following the chipmaker's announcement of significant partnerships with Google and Anthropic. The company is set to produce advanced versions of artificial intelligence chips specifically for Google, while the expanded collaboration with Anthropic will provide the AI startup with approximately 3.5 gigawatts of computing capacity. This partnership leverages Google's AI processors, offering a boost to Broadcom's stock amid recent market fluctuations. Despite a rocky start to 2025, with shares down nearly 10% year-to-date due to investor concerns over the tech sector, the latest announcements have injected some optimism into the market. Broadcom has faced pressure from broader market dynamics, particularly following geopolitical tensions stemming from the U.S.-Israeli conflict with Iran that escalated on February 28. This decline occurred in spite of a strong earnings report in March, where CEO Hock Tan emphasized the robust future demand for the company's chips. Tan projected that AI chip revenue could exceed $100 billion by 2027, driven by the rising need for customized silicon designs. Analysts have reacted positively to the recent developments, with Matt Britzman, a senior equity analyst at Hargreaves Lansdown, noting that the revenue commitments from these deals could alleviate some of the uncertainties surrounding competition in the TPU market. He expressed confidence that Broadcom's largest customer, Google, sees long-term demand stability. Citi analysts have also reaffirmed their 'Buy' rating for Broadcom, predicting that the company could exceed its revenue target of $100 billion, potentially reaching over $130 billion due to the new deal with Google. The future looks promising for Broadcom as it navigates the complexities of the tech landscape, with these partnerships poised to enhance its growth trajectory.