J.P. Morgan Defends Broadcom Against Google Rumors
J.P. Morgan pushed back against rumors that Google may move away from Broadcom's TPU chips, calling the concerns overblown and expecting a significant upside for AVGO stock.
J.P. Morgan analyst dismissed rumors threatening Broadcom (AVGO) stock, stating that fears over Google (GOOGL) potentially ending their TPU chip partnership are overblown and predicting a strong run ahead.
Recommendation Change
The bank did not announce an official change in rating or price target, but it firmly rebutted the negative narrative surrounding Google's chip strategy.
Analyst Rationale
The analyst believes Google's partnership with Broadcom for TPU (Tensor Processing Units) remains solid, and any speculation about Google switching to other suppliers or in-house development is unrealistic in the near term. Broadcom also benefits from a diversified AI client base.
Context
The remarks come after unconfirmed reports that Google might reduce reliance on Broadcom for TPU chips. AVGO shares had come under pressure due to these rumors. Other analysts note Broadcom's strong position with clients like Apple and Amazon.
What to Make of It
Despite the rumors, J.P. Morgan's positive stance could help stabilize the stock. Investors should watch for concrete developments in the Google-Broadcom relationship.
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