Broadcom Inc (NASDAQ:AVGO) stock rose on Monday following Friday’s up move, buoyed by continued AI-related spending from major tech companies.
This upward trend was fueled by fresh signs of Big Tech’s commitment to AI investments, signaling a bright future for AI infrastructure.
Big Tech Giants Drive Capital Spending Surge
On Friday, semiconductor stocks rallied as fresh signals of AI-related spending by big tech firms lifted investor confidence.
Nvidia Corp (NASDAQ:NVDA), Broadcom, Micron Technology Inc (NASDAQ:MU), and others saw gains as Alphabet Inc (NASDAQ:GOOGL) and Amazon.com Inc (NASDAQ:AMZN) raised their capital spending projections for 2026.
Google’s push to increase its capex forecast to $175 billion–$185 billion, and Amazon’s $200 billion capital expenditure outlay, have provided a significant tailwind for companies like Nvidia and Broadcom, which supply essential AI hardware, including custom TPU chips and GPUs.
Wedbush analyst Dan Ives expects Big Tech’s capital spending to touch $550–$600 billion in 2026, up from about $380 billion in 2025.
Broadcom Positioned to Lead in AI Infrastructure
The semiconductor industry is on track to reach $1 trillion in annual revenue, driven by AI and data center growth.
According to the Semiconductor Industry Association (SIA), global sales reached $791.7 billion in 2025, and the market is expected to grow by 26% in 2026, thanks to booming demand for AI chips.
Broadcom’s Role in the AI Economy
Futurum Equities, in its latest AI Fifteen report, highlighted key factors defining the AI economy, including control of computing, data, deployment, and security.
The firm focused on companies outside the “Mag 7” that are disrupting various layers of the AI sector.
Futurum Equities recognizes Broadcom as a leader in the AI space, calling it the “Uncle Sam of AI.”
Despite some volatility in earnings, Broadcom has seen AI chip revenue surge to $6.5 billion this quarter, with projections of $8.2 billion next quarter, reflecting 100% year-on-year growth.
The company’s backlog across XPUs, switches, optics, and racks exceeds $73 billion over the next six quarters.
Broadcom is positioned as a key player in AI infrastructure, earning revenue across hardware, networking, and software.
Broadcom is not just a supplier but also plays a critical role as the “toll collector” for the entire AI stack, according to Futurum Equities.
The company continues to dominate in custom AI chips, a key driver in its growing presence in the AI economy.
AVGO Price Action: Broadcom shares were up 2.37% at $340.84 at the time of publication on Monday, according to Benzinga Pro data.
Photo Courtesy: Ken Wolter via Shutterstock
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