[Generated Title]: Broadcom's AI Bump: Reality or Just Another Hype Cycle?
Broadcom (AVGO) is enjoying a nice surge, with the stock popping 10% on the expectation that Alphabet's (GOOGL) Gemini 3 AI model will juice demand for their microchips. And yeah, GOOGL is up 5% too. The headlines are all singing the same tune: Broadcom is a key supplier, Alphabet’s success is Broadcom’s success, and everyone’s getting rich off AI. But let’s pump the brakes for a second.
Digging Into the Claims
First, the "key supplier" narrative. Broadcom is partnered with Alphabet to develop Tensor Processing Units (TPUs). This has been ongoing since 2016. But here's where the details matter. Are TPUs the only chips powering Gemini 3? Melius Research notes that "Outside of the Nvidia (NVDA) GPU for AI workloads, the TPU is the most proven AI chip out there." Note that "outside of NVDA". Implying NVDA is still a major player. How much of Gemini 3 is actually running on Broadcom silicon, and how much is Nvidia? Details are scarce, conveniently.
The other Google suppliers saw significant gains, with jumping 13.5% and rising 12%.
And then there's the "competitive advantage" angle. Analysts are saying that Alphabet’s investment in custom chip development is "now paying dividends, potentially giving the company a price advantage in AI processing." Potentially. It could give them an advantage. Or it could be a wash. Or it could turn out that custom chips are more expensive in the long run. It's all speculation at this point.
I've been looking at market trends for years and this type of volatility reminds me of the dot-com bubble.
The average AVGO price target is $399.52, implying 6.57% upside from current levels.
The Benioff Bump and the X Factor
Marc Benioff, CEO of Salesforce, hopped on X (formerly Twitter) to rave about Gemini 3, saying he's not going back to ChatGPT. Strong words. But let's be real. Benioff is a salesman. He's known for hyping up tech trends. His endorsement is worth something, sure, but it’s not exactly a peer-reviewed study.
And that's the part of the report that I find genuinely puzzling: the reliance on anecdotal evidence. The whole narrative seems to be built on a few analyst notes and a tweet from Benioff. Where's the hard data? Where's the breakdown of Broadcom's actual revenue from the TPU partnership? We're told it's a "significant revenue stream," but we don't get any numbers.
Mizuho analyst Jordan Klein noted some caution in recent trading patterns, observing that "rotation into GOOG from , , and feels like could continue as every day more substack articles on how great new Gemini 3 is and what a big lead it now has over Claude, GPT and other models."
Is This Time Really Different?
Look, I'm not saying Broadcom is a bad company. They're clearly doing something right. But this AI-fueled stock surge feels a little too… familiar. It’s reminiscent of the early days of crypto, where any company that even mentioned "blockchain" saw its stock price double overnight. We need to be careful of narratives that run ahead of reality. We need to see the numbers, the actual revenue figures, the concrete evidence that this TPU partnership is truly a game-changer for Broadcom. Until then, I'm staying cautiously skeptical.
