Morgan Stanley: Broadcom bears are wrong about Google TPU

Morgan Stanley defended Broadcom’s AI chip franchise, arguing fears that MediaTek is replacing Broadcom in Google’s TPU program are overstated. The bank reiterated an overweight/buy-equivalent stance and a $502 price target, saying Broadcom should retain about 80% of Google TPU business over time. The article frames the debate as one of pace, not cancellation, with Google likely diversifying suppliers but not abandoning Broadcom. Broadcom’s fundamentals remain strong: fiscal Q2 revenue hit a record $22.19 billion, AI semiconductor revenue rose 143% to $10.8 billion, and the company expects AI chip revenue to grow more than 200% in the current quarter. Still, the stock is lagging peers, down about 19.1% from its June 2 record close of $480.77 despite a 1.32% rebound on July 14. Investor sentiment remains divided, with JPMorgan more bullish and Macquarie more cautious on Broadcom’s future TPU share.