JPMorgan analyst Harlan Sur said Broadcom Inc's (NASDAQ:AVGO) long lead in custom artificial intelligence (AI) chips is helping its AI Application-Specific Integrated Circuit (ASIC) outlook accelerate into fiscal 2026 and fiscal 2027, with Alphabet Inc (NASDAQ:GOOGL) Google as the key driver.
Broadcom Extends Its Lead Over Customer-Led Chip Programs
Sur maintained an Overweight rating on Broadcom and a price forecast of $475.
The analyst said Broadcom has an 18-month-plus head start over internal customer-owned tooling efforts, in which customers handle about 90% of the design work.
He pointed to Google's 3nm Zebrafish program as an example, saying it has faced repeated delays and may not produce first silicon until the end of this quarter or early next quarter.
Sur contrasted that with Broadcom's next-gen 3nm Tensor Processing Unit (TPU), code-named Sunfish, which he said Google evaluated and qualified earlier, giving Broadcom a meaningful timing advantage.
Sur said Google is seeing more success supporting external AI workloads with its TPU platform and now targets deploying 6 million to 7 million TPU processors in calendar 2027, up from his prior view of 5 million units.
The analyst expects most of those 2027 shipments to support external customers and said those deployments will be powered entirely by Broadcom and Google's Sunfish 3nm TPU ASIC.
He added that even Google's internal TPU usage in 2027 should rely primarily on Sunfish, leaving more than 95% of Google's 6 million to 7 million TPU units in 2027 powered by Broadcom silicon.
Purchase Orders, Supply Constraints, And The Next Node
Sur added that Broadcom already has multi-billions of dollars in purchase orders tied to the Sunfish ramp that starts in the second half of this year, and he believes Broadcom's AI backlog has continued to grow by billions since the December earnings call across current-gen Ironwood and next-gen Sunfish shipments.
The analyst also said that tightening lead times for wafers, CoWoS, HBM, and advanced substrates make early qualification critical.
He expects that dynamic to limit volume potential for later-starting programs like Zebrafish.
Sur added that Broadcom has already begun designing Google's next TPU ASIC on 2nm, targeted for volume production in calendar 2028.
The analyst said he would buy aggressively at current levels. Sur projects first-quarter revenue of $19.14 billion and adjusted EPS of $2.02.
AVGO Price Action: Broadcom shares were up 1.93% at $320.10 at the time of publication on Monday, according to Benzinga Pro data.
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