Alphabet- (NASDAQ:GOOGL)(NASDAQ:GOOG) owned Google downplayed a media report that suggested that the tech giant is ditching ties with chip maker Broadcom (NASDAQ:AVGO). Putting an end to the speculation, a Google spokesperson affirmed that the partnership with Broadcom has been instrumental in fulfilling the company’s internal and external cloud requirements. Furthermore, Google foresees no alterations in its ongoing engagement with AVGO.
Investors should note that Broadcom supplies tensor processing unit (TPU) chips to Google, which are used for AI. Further, both companies share a bidirectional relationship. For instance, Broadcom supplies the chips for Google phones, data center, and its cloud services. On the other hand, one of Google Cloud’s largest clients for its cloud services is Broadcom.
Speaking on the development, Robert W. Baird analyst Colin Sebastian reiterated his bullish stance on Broadcom stock on September 21. Sebastian has termed AVGO stock the “Top Idea” and sees the company as well-positioned to retain Google for the long term.
The analyst added that his industry discussions revealed Broadcom’s TPU-related volumes will grow from 700K units in 2023 to 3 million in 2024. Moreover, Sebastian expects Broadcom to retain its customers in the long term. While Sebastian is bullish about AVGO’s prospects, let’s look at the Street’s consensus rating.
Is AVGO a Good Buy Now?
Including Sebastian, AVGO stock has received 16 Buy recommendations. Also, two analysts maintain a Hold rating. Overall, Wall Street is optimistic about Broadcom’s prospects, as reflected by the Strong Buy consensus rating.
The company developed an end-to-end platform that enables its customers to create and deploy their AI clusters. Thus, its financials are expected to benefit from the acceleration in generative AI deployments.
The stock has gained over 47% year-to-date. Meanwhile, analysts’ average price target of $981.81 implies 21.46% upside potential from current levels.