AVGO Stock Has Declined For 4 Months Straight – Will Google TPU Deal Make April Green Again?

• Broadcom expanded its chip design agreement for Google TPUs till 2031; AVGO jumped 3.4% in Tuesday’s premarket.
• The development positions Broadcom as a major AI chip designer, an area dominated by Nvidia. 
• Stocktwits retail investors laud Broadcom’s heavy exposure to AI names and view the stock's weakness as a buying opportunity. 

Broadcom shares posted negative returns for four months, as investors rotated their money out of tech stocks and, more recently, the market pressure related to the U.S.-Iran war

However, April is looking steadier, with the stock up marginally. AVGO gained 3.4% in the premarket session on Tuesday after Broadcom announced an extension of its long-standing chip deal with Google.

Broadcom has been co-designing Google’s chips, known as Tensor Processing Units or TPUs, since 2016, and the new agreement firms up the relationship through 2031.

The announcement also included an extension of Google and Broadcom’s 2025 TPU deal with AI startup Anthropic, set to significantly expand Anthropic’s use of TPUs to power its Claude AI model next year. The development positions Broadcom as a major AI chip designer, an area dominated by Nvidia. 

Retail’s View On AVGO Improves

The AVGO ticker trended heavily on Stocktwits early Tuesday, with the Google deal extension fueling major excitement about the company’s prospects. 

“Tonight's news absolutely cements Broadcom as the new undisputed king of AI,” a user said. “Not even the great $NVDA is signing 5-year agreements with their customers… Broadcom will soon be the main provider of AI chips to the 2 biggest companies that are actually disrupting industries left and right: $GOOGL $GOOG and Anthropic.”

“The best bet to get exposure to ANTHROPIC is not these funds like $VCX, ITS $GOOG $AMZN $AVGO,” said another user, referring to the recently launched and in-demand venture-style fund Fundrise Innovation Fund.

Analysts See 50% Stock Upside

To be sure, AVGO shares are still about 24% below their record high on Dec. 10 and down 9% year-to-date. That’s despite Broadcom reporting first-quarter results that surpassed estimates, and an upbeat forecast early last month.

Currently, an overwhelming 47 out of 49 analysts recommend ‘Buy’ or higher for AVGO stock, and two recommend ‘Hold,’ according to Koyfin. Their average price target of $471.55 implies a 50% upside from the stock’s last close.

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