By Adam Clark

Broadcom and Nvidia were gaining early on Thursday. Huge spending on artificial-intelligence infrastructure by Google-parent Alphabet bodes well for the chip makers.

Google stunned the market with guidance for capital expenditure of $175 billion to $185 billion this year, up from $91 billion to $93 billion in 2025. It plans a massive investment in AI data centers and the chips to fill them.

Broadcom shares were up 5.6% in premarket trading. Broadcom is a partner in developing Google's Tensor Processing Units, the search company's in-house AI chips. The Google program probably accounts for more than 80% of Broadcom's AI compute sales, according to BofA Securities.

Nvidia shares were up 1.5% in premarket trading. While Google's TPUs and Nvidia's graphic-processing units, or GPUs, are increasingly viewed as rivals, Alphabet still offers both to its cloud-computing customers.

"We offer leading infrastructure for AI training and inference to our cloud customers with the industry's widest variety of compute options, from our own seventh-generation Ironwood TPU to the latest Nvidia GPUs," Alphabet CEO Sundar Pichai said on an earnings call.

About 60% of Google's capex spending is expected to go to short-term assets, which includes TPUs and GPUs. Google didn't break down exactly how much it intends to allocate between the two types of chip, although analysts noted its margins improve the more it uses its own in-house hardware.

That could account for why Broadcom is getting a bigger boost, although the chip maker doesn't have Google's TPU business all to itself, as it competes with Taiwan's MediaTek.

"We believe that 30-40% market share within TPU appears to be the long-term expectation for MediaTek. At the same time, we haven't really seen any reduction in...supply chain expectations for Broadcom either," wrote J.P. Morgan analyst Gokul Hariharan in a research note on Thursday.

Write to Adam Clark at adam.clark@barrons.com

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February 05, 2026 07:14 ET (12:14 GMT)

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