Losing Google would ‘dampen AI sentiment’ for Broadcom, says Wells Fargo

Wells Fargo says Broadcom (AVGO) shares are trading sharply lower on a report by The Information that Google (GOOG, GOOGL) has had “extensive discussions” about moving away from Broadcom as its artificial intelligence chip partner. Such a move “would certainly dampen AI sentiment surrounding Broadcom,” the analyst tells investors in a research note. The firm says losing the tensor processing units design would be a multi-billion dollar annual impact to Broadcom. Wells notes Broadcom’s Custom Silicon business, which includes the TPU, YouTube video encoding chips, Meta’s MTIA, and more has been one of the fastest-growing segments of Broadcom’s business. The firm keeps an Equal Weight rating on Broadcom shares with a $900 price target. The stock in midday trading is down 2% to $813.15.