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Broadcom Hits $2 Trillion Market Cap as Google Reveals New AI Chips

Author: Leo Miller. Published: 4/28/2026.

As Broadcom (NASDAQ: AVGO) has surged to new all-time highs, the company has a key partner to thank: Google parent Alphabet (NASDAQ: GOOGL).

On April 22, the semiconductor giant climbed to what was then a record closing high near $422. In the process, Broadcom briefly eclipsed a $2 trillion market capitalization.

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The move followed a new artificial intelligence (AI) chip announcement from Google, Broadcom’s top customer. The stock rose 5% that day, although shares have traded slightly lower since.

Google’s announcement offers support for Broadcom’s earlier predictions and suggests the relationship between the two companies is only deepening.

Google’s 8th Gen TPU: 2 Chips Instead of 1

Google co-develops its tensor processing units (TPUs) with Broadcom, and the two companies have partnered on the technology for about a decade. Now, Google has announced its eighth-generation product, but with a key distinction this time around.

The eighth generation will feature two chips, not one, which specialize in different use cases. This marks a significant shift from the norm, as the majority  of prior TPU generations included only one chip. Google notes that TPU 8t will be a “training powerhouse," while TPU 8i will be a “reasoning engine” for the most latency-sensitive inference workloads.

Google’s announcement lines up almost exactly with what Broadcom CEO Hock Tan has said in the past. In the company’s last earnings call, Tan said that customers would “start to develop two chips each year simultaneously, one for training, one for inference to be specialized.” These comments came in early March. For Broadcom, this is an important win for several reasons.

Why Google’s 2-Chip Roadmap Benefits Broadcom

First, by splitting the eighth-generation TPU into two chips, Broadcom may benefit more as AI adoption continues to expand. That adoption is closely tied to inference usage, or AI models answering questions and performing tasks. With a customized inference chip in TPU 8i, Google can scale inference workloads more efficiently.

Google says TPU 8i delivers 80% better performance per dollar than the seventh-generation TPU. According to Google, this allows businesses to serve nearly twice the inference volume at the same price. As TPU 8i lowers costs, inference demand should rise. That should, in turn, increase demand for the chips themselves, which is a clear positive for Broadcom.

Furthermore, by developing two specialized chips, Broadcom’s hardware expertise is becoming increasingly important. In single-chip deployments, companies can optimize a chip for certain workloads using software. However, the gains possible through software optimization are far smaller than those achieved at the hardware level. Google’s move to two chips aligns with that view.

For Broadcom, a shift away from software optimization and toward hardware is a good thing, since hardware is its specialty. This could allow the company to capture more value per chip.

In addition, developing two chips requires more work than developing one. Broadcom should be compensated for that added work, likely allowing the company to generate more revenue from the chip design process.

Lastly, the announcement is yet another confirmation of what Hock Tan previously said. Meta Platforms (NASDAQ: META), another Broadcom customer, announced its custom chip roadmap in mid-March. Meta titled the announcement “Four MTIA [Meta Training and Inference Accelerator] Chips in Two Years: Scaling AI Experiences for Billions.” That also fits the two-chips-per-year framework, and the Google and Meta announcements add credibility to Broadcom’s statements.

Importantly, Broadcom says it is seeing these two-chip-a-year roadmaps across five customers. With two customers now confirming this approach, confidence that the other three will follow increases. That could allow the benefits of Google’s two-chip deployment to extend across the rest of Broadcom’s hyperscaler customer base.

Broadcom Soars as Hyperscaler Earnings Approach

Overall, Broadcom continues to show that customers are deepening their relationships with the company. As investors recognize Broadcom’s growing importance in the AI buildout, shares are moving to unprecedented levels.

At the same time, Broadcom trades at a depressed forward price-to-earnings (P/E) ratio compared with its recent past. With earnings expectations now more aligned with the stock’s valuation, Broadcom’s ability to hold recent gains, or potentially move higher, improves.

A potential slowdown in hyperscaler AI spending remains a risk, but one that has not surfaced so far. Fast-approaching earnings from multiple Magnificent Seven companies should provide more insight into the spending outlook.