Broadcom Surges 11% as Alphabet AI Chip Partnership Reshapes Markets

The technology sector experienced a significant rally yesterday, 24 November 2025, with Broadcom shares recording their strongest single-day performance since April as investors demonstrated renewed confidence in the artificial intelligence infrastructure market. The semiconductor manufacturer's surge coincided with continued strength in Alphabet shares, highlighting an evolving narrative in AI chip development that extends beyond traditional graphics processing units.

TL;DR 

• Broadcom shares surged 11.1% on 24 November, marking the S&P 500's strongest performance as investors returned to AI-linked technology companies

• Alphabet shares rose over 5%, continuing a 21% rally over the past month, driven by Google's Gemini 3 AI model and seventh-generation TPU chip development

• The connection between Broadcom and Alphabet centres on application-specific integrated circuits (ASICs), with Broadcom designing and manufacturing Google's tensor processing units since 2016

• Wall Street analysts have raised price targets significantly, with Jefferies setting a $480 target, implying 41% upside potential

• The rally reflects broader market enthusiasm for custom AI chips beyond Nvidia's GPU dominance

Broadcom Stock Performance: 60% YTD Gains Drive S&P 500 Leadership  

Broadcom's 11.1% gain positioned the company as the top performer within both the S&P 500 and the Technology Select Sector SPDR Fund (XLK), which tracks the technology sector of the benchmark index. This single-day rally brought the stock's year-to-date performance to approximately 60%, demonstrating sustained investor interest in the company's AI-related business segments.

The company has established itself as a leading supplier of high-performance application-specific integrated circuits (ASICs) for hyperscale cloud providers. These custom chips are designed for specific workloads rather than general-purpose computing, offering optimised performance for particular applications.

Melius Research analyst Ben Reitzes reinforced his buy rating in October 2025, raising his price target by $60 to $475. This could suggest a potential upside of 39.6% from the closing price on 22 November  2025. Reitzes noted that Google and Broadcom have collaborated on custom ASIC development since 2016, with the partnership now in its seventh generation of tensor processing units. (Source: CNBC)

The Broadcom-Alphabet Partnership

The relationship between Broadcom and Alphabet represents a critical element of Google's AI infrastructure strategy. Broadcom designs and manufactures Google's Tensor Processing Units (TPUs), which serve as the company's proprietary AI chips for its internal infrastructure. These TPUs compete directly with Nvidia's AI graphics processing units, whilst remaining exclusive to Google's operations.

According to CNBC, Google released its seventh-generation TPU, named "Ironwood," in November 2025, a decade after creating its first custom ASIC for artificial intelligence in 2015. The progression may demonstrate Google's long-term commitment to developing proprietary chip technology.

Jefferies analyst Blayne Curtis, who maintains the highest price target amongst analysts covering Broadcom, elevated his price target by $65 to $480 in early November. This target implies potential upside of 41% from Friday's closing price. Curtis identified an "inflection point" for ASICs as Google's custom chip requirements continue expanding.

The analyst noted that, while Google has long been Broadcom's primary ASIC customer, volumes are expected to become substantially more significant in calendar years 2026 and 2027. Google's token processing capacity increased from 480 trillion in April 2025 to 1,300 trillion by October 2025, with further growth anticipated as multimodal AI models require additional computational resources.

Alphabet's AI-Driven Valuation Momentum

Alphabet shares have outperformed fellow "Magnificent Seven" technology companies over the past month with a 21% gain, propelling broader market indices higher during recent trading sessions. According to Reuters, Alphabet is advancing towards a $4 trillion valuation as AI-fuelled gains accelerate.

Investor enthusiasm stems from several recent developments:

• Gemini 3 AI Model: Google's latest artificial intelligence model has received positive reception from both investors and industry observers. Salesforce CEO Mark Benioff endorsed the technology, contributing to market confidence.

• Ironwood TPU: The seventh-generation tensor processing unit announced in November 2025 represents Google's continued investment in proprietary AI infrastructure.

• AI Image Generation: Advancements with "Nano Banana Pro" demonstrate Google's expanding capabilities across multiple AI applications.

• Google Antigravity Platform: A new agent platform extending Google's AI ecosystem.

Yahoo Finance reported that Alphabet reached a fresh record high on optimism surrounding the next version of its Gemini AI tool, with shares rising to lead a broader technology sector rally on 24 November 2025.

Analyst Perspectives and Market Implications

Dan Ives, global head of technology research at Wedbush Securities, characterised Broadcom and Alphabet as "new AI plays the market is rediscovering." Ives, who holds both stocks in the Dan IVES Wedbush AI Revolution ETF, stated: "This could be the most proven ASIC chip in the market, and the AI Revolution is still in its  early days.”

The analyst described the shift in Street sentiment as representing "a historic quick turnaround to the very bullish" perspective currently prevailing amongst institutional investors.

Melius Research's Reitzes highlighted that Google's tensor processing unit has become "the most proven ASIC" in the market outside of Nvidia's GPU offerings for AI workloads. He noted that the TPU is "rapidly becoming a larger part of Alphabet's growth strategy," with implications extending beyond Google to benefit Broadcom through its design expertise.

Interestingly, Meta Platforms is reportedly considering utilising Alphabet's custom chips for its data centres, potentially expanding the market for Google's TPUs beyond the company's internal infrastructure.

Broader Market Context

The rally in Broadcom and Alphabet shares occurred as the Nasdaq Composite posted its strongest single-day gain since May 2025, with the S&P 500 also recording substantial advances. The Technology Select Sector SPDR fund saw Broadcom as its top performer yesterday.

The movement appears to represent a resurgence of investor confidence in the artificial intelligence infrastructure sector, following a period of consolidation and concerns about valuation levels. Alphabet's outperformance relative to other Magnificent Seven stocks suggests market participants are identifying specific catalysts and competitive advantages rather than applying uniform sector-wide enthusiasm.

The partnership between Broadcom and Alphabet demonstrates an alternative approach to AI infrastructure development, with custom ASICs offering potential advantages over general-purpose GPUs for specific workloads. This differentiation has attracted investor attention as the AI sector matures beyond initial infrastructure buildout phases.

Conclusion

Broadcom's 11.1% surge and Alphabet's strength reflect increasing market recognition of their strategic partnership in custom AI chip development. Broadcom manufactures Google's Tensor Processing Units (TPUs), a competitive alternative to Nvidia's GPUs. 

Analysts forecast 39.6% to 41% upside for Broadcom due to rising custom AI chip demand. Alphabet's push toward a $4 trillion valuation is supported by proprietary AI infrastructure investments. 

As Google's computational needs grow, the Broadcom partnership, benefiting from rising ASIC volumes, is crucial for both companies, suggesting that many investors favour those with differentiated AI infrastructure.

*Past performance does not reflect future results. The above are only projections and should not be taken as investment advice.