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Investing.com -- Wall Street lifted its expectations for Broadcom after fresh evidence of rising demand for Google’s custom Tensor Processing Units (TPUs), which are designed and sold by the chipmaker.
New checks from both Bank of America (BofA) and Morgan Stanley point to a faster and larger TPU build-out through 2026 and 2027, pushing analysts to raise sales forecasts and price targets.
BofA flagged Broadcom’s increasing leverage to Google’s TPU roadmap following the full Gemini 3 launch and the prospect of expanding external rental of TPUs through Google Cloud.
Broadcom’s current average selling prices (ASPs) of about $5,000–6,000 and roughly 2 million expected units in 2025 could rise sharply as the next generation ramps, BofA analysts led by Vivek Arya said in a note.
They now see those figures increasing to around $12,000–15,000 per unit and more than 3 million units in 2026. In an upside scenario, the number of units could surge toward 3.6-3.8 million “if demand continues to expand,” the analysts added.
To reflect this stronger outlook, BofA raised its price target to $460 from $400.
The bank also highlighted the competitive positioning of the latest TPUv7 in specific workloads, especially power-efficient FP8 training, while noting that upcoming Nvidia architectures remain a key benchmark for the broader ecosystem.
Alongside the price target hike, BofA modestly trimmed gross margin expectations due to a higher compute and ASIC mix but left overall earnings largely unchanged.
Morgan Stanley echoed the stronger TPU trajectory, saying Google’s processor supply chain “is getting revised higher,” supported by its latest Asia trip checks.
The Wall Street bank raised its Broadcom price target to $443 from $409 after lifting ASIC revenue estimates for 2026 and 2027, citing updated component and foundry expectations.
It now models 3.2 million TPU units in 2026 and 5 million in 2027, compared with roughly 3 million previously.
While noting that the TPU ramp is coming “slightly at the expense of other Broadcom customers,” Morgan Stanley analyst Joseph Moore said Broadcom remains well positioned to retain most design opportunities.
He also flagged Google’s parallel work with MediaTek as a longer-term risk but sees no major share loss in its base case.