Broadcom Inc (NASDAQ:AVGO) shares are rising in extended trading on Wednesday after Alphabet Inc (NASDAQ:GOOG) (NASDAQ:GOOGL) forecasted a massive jump in capital expenditures this year.
- Broadcom stock is among today’s top performers. Why is AVGO stock up today?
Google CapEx Expectations Soar
Alphabet reported earnings for the fourth quarter after the market close on Wednesday, beating estimates on the top and bottom lines with revenue of $113.83 billion and adjusted earnings of $2.82 per share.
The number that really stands out is the tech giant’s anticipated CaPex of $175 billion to $185 billion for 2026. Analysts had been anticipating total spend of around $115 billion this year, according to a Reuters report, citing data compiled by LSEG.
“We’re seeing our AI investments and infrastructure drive revenue and growth across the board,” Alphabet’s Google said in its earnings release.
The significantly raised CaPex guidance signals much more spending on data centers, AI hardware and cloud infrastructure. That bodes well for Broadcom as Google is a huge customer of Broadcom’s ASIC business, which involves supplying high-performance, application-specific chips for hyperscalers.
Broadcom helps design and manufacture Google’s tensor processing units (TPUs), the company’s in-house specialized AI chips for internal AI infrastructure. Broadcom has been involved in every generation of Google’s TPU AI chips, handling design translation, high-speed interfaces, packaging and more.
Alphabet said Google Cloud revenue increased 48% year-over-year in the fourth quarter.
“Our first party models, like Gemini, now process over 10 billion tokens per minute via direct API use by our customers, and the Gemini App has grown to over 750 million monthly active users,” CEO Sundar Pichai said.
AVGO Stock Rises In After-Hours Trading
AVGO Price Action: Broadcom shares were up 6.73% at $328.73 at the time of publication on Wednesday, according to Benzinga Pro.
Broadcom’s RSI is currently at 38.94, which is considered neutral but leans towards oversold territory.
Key support is at $321.50, while resistance is around $340. If the stock tests the support level and fails to hold, it could signal a continuation of the recent downtrend, while a break above resistance might indicate a potential reversal.
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