Broadcom's recent stock surge of 10% to $372 reflects renewed interest in its collaboration with Google on the TPU chip. Following Google's introduction of the Gemini 3 update, which harnesses the power of these chips, Alphabet's shares also rose by 5%, driven by expectations surrounding the update's enhancements in AI performance.
The partnership between Broadcom and Google has been in effect since 2016, with the development of Tensor Processing Units, or TPUs, now in its seventh iteration. Gemini 3, which predominantly uses these TPUs, is poised as a viable alternative to traditional GPU-based systems. Investors view this as a significant move towards cost-efficient processing solutions
This TPU initiative represents a vital source of revenue growth for Broadcom, especially as Google Cloud broadens its AI resources. With Broadcom’s stock nearing its 52-week high of $386, retail investors should attentively monitor this trend as it unfolds, highlighting the potential for continued growth in this technology sector.