Rising investment in artificial intelligence by major technology companies has renewed focus on the firms that supply the hardware and networking backbone for expanded data-center capacity. Among those vendors, one semiconductor company has emerged in analysts' views as a primary beneficiary of the wave of AI-driven capital spending.
Alphabet (NASDAQ:GOOGL) is named as one of the technology leaders sharply increasing investment to grow AI-focused data centers. A large share of that outlay is being directed toward servers, compute components and networking equipment - categories that are directly tied to the manufacture of custom AI chips and the systems that link them together.
Jordan Klein, a technology, media and telecom specialist at Mizuho, singled out Broadcom (NASDAQ:AVGO) as a key recipient of the post-capex surge trade. Klein pointed to Broadcom’s central role in supporting production of Google’s tensor processing units, or TPUs, in addition to supplying critical networking components used inside contemporary data centers.
“We know that at least 60% of the GOOG $180B capex guide is servers. So that is a ton of compute, and a lot of TPUs made by AVGO,” Klein wrote, noting that Google will both deploy those chips internally and sell compute capacity externally to additional AI customers.
The analyst contrasted Google’s growing reliance on its proprietary TPU architecture with the broader industry trend of using graphics processors from other vendors for many AI workloads. Broadcom’s expansion into custom silicon - its ASIC business - has played a supporting role for Google’s TPU production, and Klein said that Broadcom’s involvement extends beyond pure compute into networking and connectivity, which makes up the remainder of Google’s infrastructure expenditure.
Klein offered a pointed valuation view on Broadcom’s recent share-price move. “AVGO IS THE BIGGEST WINNER in my view and low $300s to me is a close to a ‘gift’ you will ever see, assuming you have duration and patience,” he wrote in a pre-open note.
Broadcom’s custom silicon strategy has reached other customers as well. The company has begun selling Google’s TPU Ironwood rack systems to Anthropic, a development Klein cited as evidence of growing commercial demand for non-GPU AI hardware.
Shares of Broadcom have retreated roughly 30% from their peak, a pullback Klein interprets as producing a rare long-term entry point against the backdrop of accelerating AI infrastructure investment across the technology sector.
Bottom line: An analyst at Mizuho views Broadcom as a primary beneficiary of AI-driven data-center capex, especially given the scale of Google’s server-focused spending and Broadcom’s role in TPU production and networking. The recent share-price decline is framed as an uncommon buying opportunity for investors willing to wait for long-term returns.