Key Takeaways
- Nvidia rival Broadcom, which counts Google as a major customer, has seen its stock surge recently along with Alphabet’s.
- With its recent gains, the custom AI chipmaker’s stock is one of the top performers in the S&P 500 this year, outpacing Nvidia’s rise.
Alphabet’s stock has been on a roll lately. One big beneficiary of that move? Broadcom.
The rise in shares of Alphabet, Google’s parent company, has helped inject some energy back into a flagging AI trade. That’s had knock-on effects on a range of tech stocks—though few have benefitted as much as Broadcom (AVGO), which counts Google as a major customer for its AI chips.
Broadcom’s shares have surged recently, climbing along with Alphabet’s (GOOGL, GOOG), which have been lifted by a series of positive developments for the cloud giant from a vote of confidence from Warren Buffett’s Berkshire Hathaway to an upbeat reception for its latest AI model and signs of a new deal involving its chips.
Why This Is Significant
Alphabet and Broadcom are seeing their shares advance at a time when some AI favorites like Nvidia are flagging. That could point to some shifts to watch in the AI trade’s biggest gainers—and the competitive landscape for chips.
Alphabet shares advanced around 2% to finish at a fresh high Tuesday, and have added about 17% since Berkshire’s stake was revealed in a regulatory filing a little over a week ago.
Broadcom’s stock, meanwhile, has climbed about 12% over the same period. The shares ticked about 2% higher Tuesday to near their all-time high, while Nvidia (NVDA), Advanced Micro Devices (AMD), and other chipmakers lost ground.
With its recent gains, Broadcom’s stock is up close to 70% for the year, making it one of the top performers in the S&P 500 this year so far. It’s outpaced Nvidia’s roughly 33% climb in 2025, along with the rest of the Magnificent 7.
Bernstein analysts said in a note Tuesday Broadcom “would be a clear winner” of a reported chip deal in the works between Meta (META) and Google, as both Google’s custom chip partner of choice and a supplier for Meta.
“And while the stock is growing more expensive perhaps it is justified as we continue to believe that Street estimates look far too low,” the analysts said. Bernstein maintained an “outperform” rating and $400 target for the shares. All 12 of the analysts with current ratings surveyed by Visible Alpha consider the stock a buy, though it’s surpassed their mean target around $378.
There’s still some optimism in Bernstein’s outlook for Nvidia, though. Its analysts reiterated a bullish rating and $275 target for the shares, saying that booming demand for AI hardware is likely to benefit both it and Broadcom.
Broadcom “has the narrative at the moment, but [Nvidia’s] valuation is looking increasingly attractive and the sell-offs seem overdone to us,” they said. “We would be buyers (and continue to like both stocks).”
