Broadcom’s AI-Driven Ascent: Custom Chips Fuel Market Surge

The recent unveiling of Google's Gemini 3 artificial intelligence model has triggered a powerful rally for Broadcom shares, propelling the semiconductor designer's market valuation beyond the $1.7 trillion threshold. This double-digit percentage surge highlights the growing recognition of Broadcom's pivotal position within the AI infrastructure ecosystem, with several market analysts now establishing price targets as high as $480.

Financial markets have responded with notable enthusiasm to recent developments. Multiple research institutions significantly raised their price objectives for Broadcom on Tuesday, reflecting strengthened confidence in the company's trajectory. Ben Reitzes of Melius Research emphasized that Google's early collaborative investments with Broadcom in custom silicon are now demonstrating substantial returns. This optimistic perspective is shared by Mizuho and other analysis firms, with some establishing a $480 per share valuation.

Key developments driving market sentiment:

• Broadcom shares have advanced more than 10% since the beginning of the week
• The company's market capitalization has surpassed $1.7 trillion
• Exclusive design partnership with Google for Tensor Processing Units (TPUs)
• Gemini 3 performance validates custom chip strategy effectiveness
• Analysts anticipate continued upward momentum

The Custom Silicon Advantage

While market attention frequently centers on Nvidia's GPU technology, Broadcom has strategically established itself as an indispensable partner to hyperscale cloud providers. The catalyst for the current rally stems from Google's latest AI model operating on TPUs that Broadcom designs and manufactures exclusively. Industry experts note that Google's hardware performance exceeds competing solutions, underscoring the critical importance of Broadcom's application-specific integrated circuits within the technology infrastructure of industry giants.

Should investors sell immediately? Or is it worth buying Broadcom?

The collaboration between Google and Broadcom has evolved through multiple generations of TPU chips, with the seventh iteration currently in development. This business relationship is characterized by its highly profitable, recurring nature, creating a competitive barrier that traditional chip suppliers cannot easily overcome.

Positioning for the Next AI Evolution

Market observers identify Broadcom as a primary beneficiary of what they term the "second wave" of artificial intelligence expansion. As custom ASICs increasingly complement standard GPUs at scale, the company is experiencing a fundamental market reassessment. Previously viewed primarily as a connectivity and software enterprise, Broadcom is now being recognized as a crucial AI infrastructure platform.

The upcoming earnings report scheduled for early December is expected to provide greater clarity regarding AI-related revenue projections for fiscal year 2026. From a technical analysis perspective, the outlook remains positive, though the Relative Strength Index approaching overbought territory suggests potential near-term profit-taking activity. Nevertheless, as long as hyperscale companies continue accelerating their investments in custom silicon, analysts maintain that the upward trend remains firmly established.