Morgan Stanley Issues Strongest Defense of Broadcom in AI Chips

Broadcom (AVGO) shares climbed Tuesday, July 14, 2026, after Morgan Stanley published one of its most forceful defenses yet of the company's position in artificial intelligence chips. The relief looks fragile, however, as the stock is still down sharply from the record high it set barely six weeks earlier.

Recommendation Change

The report did not explicitly change its rating or price target, but it represents a strong reaffirmation of confidence in Broadcom amid market skepticism.

Analyst's Rationale

Morgan Stanley analysts believe that fears surrounding Google's TPU (Tensor Processing Unit) chip are overblown. They argue that Broadcom remains well-positioned to benefit from growing demand for custom AI chips and that its partnership with Google is not as threatened as some believe.

Context

The defense comes after a sharp decline in Broadcom's stock from its all-time high six weeks ago. Reports of Google developing its own in-house chips had raised concerns that Broadcom could lose one of its key customers. Morgan Stanley, however, sees these concerns as unjustified.

What to Make of It

Morgan Stanley's report highlights a divide on Wall Street over Broadcom's future in the AI race. While the stock remains volatile, support from a major analyst could provide some reassurance for long-term investors.