Alphabet Inc. Class C partnering with MediaTek is a short-term noise. "Standing in the light" Broadcom Inc. (AVGO.US) is transitioning from the shadow of TPU towards becoming a full-stack AI factory sell-shovel man.

During the trading hours of Wednesday in the US stock market, Broadcom Inc. (AVGO.US), one of the big winners in the global AI boom, became a market focus. Prior to this, the Wall Street renowned investment firm Wedbush Securities made a key comment on a media report that Taiwan's leading chip design company, MediaTek, may become the main collaborative design manufacturer for Alphabet Inc. Class C Tensor Processing Unit (TPU), replacing Broadcom Inc.'s longstanding position as a partner in TPU AI compute cluster. After the latest report from the media, Broadcom Inc.'s stock price actually rose slightly by 0.51% at the close of Wednesday, despite a drop of over 3% on Tuesday during the global semiconductor stock downturn. Rumors of Alphabet Inc. Class C TPU potentially shifting towards MediaTek will indeed weaken the single narrative of "Broadcom Inc. being irreplaceable in the custom ASIC market", as pointed out in Wedbush's latest comment. If the switch to MediaTek for Alphabet Inc. Class C v9 TPU design is true, it will suppress the market's perception of Broadcom Inc.'s relative advantage over its peers and significantly increase MediaTek's profit expectations for 2028. However, the expansion of customers like OpenAI, Meta, and Anthropic is reshaping Broadcom Inc. from being a "head of the Alphabet Inc. Class C TPU supply chain + AI ASIC head" to a super platform AI compute infrastructure company providing "AI ASIC custom AI chips + network infrastructure + data center optical interconnect systems". This is also the core logic behind Wall Street's continued bullish target price for Broadcom Inc. MediaTek challenges Broadcom Inc.'s AI ASIC dominance "We do not express an opinion on whether the information disclosed by Commercial Times is accurate; however, if the news is true, we would certainly consider this market shift to have significant implications for the AI ASIC semiconductor industry, as this outcome would present: 1) an obvious blow to the viewpoint that Broadcom Inc., the long-time dominant player in AI ASIC, has a superior position in the custom AI ASIC market compared to its peers; 2) significant upside potential for MediaTek's growth expectations for 2028, as its entry into the production ramp of Alphabet Inc. Class C TPU capacity seems likely to accelerate." Wedbush analyst Matt Bryson wrote in a report to clients. Alphabet Inc. Class C, Broadcom Inc., and MediaTek did not immediately respond to media requests for comment. Taiwan's news media Commercial Times reported earlier this week that Alphabet Inc. Class C may shift its next-generation cutting-edge TPU compute cluster design work to MediaTek in 2028, involving the soon-to-be-released v9 TPU series products, also known as Triggerfish, the ninth generation TPU AI compute cluster. The news media added that Alphabet Inc. Class C originally intended to partner with Broadcom Inc. and use its 448G SERDES technology, but technical delays may have led to this partner switch. Alphabet Inc. Class C previously launched its eighth-generation TPU at the Google Cloud Next 2026 event in Las Vegas in April. In other TPU-related news, Alphabet Inc. Class C may use some of Samsung Electronics' advanced process technology to manufacture its high-performance memory input-output die for its upcoming tenth-generation TPU in the coming years, partly due to the long-term capacity constraints of Taiwan Semiconductor Manufacturing Co., Ltd. Sponsored ADR (TSM.US) at 3nm and below advanced chip process. Broadcom Inc. transitions from the shadow of Alphabet Inc. Class C TPU to a "AI factory" level full-stack AI compute provider Broadcom Inc. has entered the realm of custom AI chips outside the realm of NVIDIA Corporation GPUs with its focus on Google TPU (TPU technology route is a typical AI ASIC chip), OpenAI/Anthropic and other cloud giants' self-developed AI ASIC accelerators, which represent the largest incremental market for custom AI chips besides NVIDIA Corporation's GPUs. AI ASIC is undoubtedly the first core pillar that drives the upward movement of Broadcom Inc.'s valuation and fundamentals, as evidenced by Broadcom Inc.'s recent strong financial reports confirming unprecedented strong growth logic in AI ASIC. Broadcom Inc. expects AI chip sales to exceed 100 billion dollars in 2027, with AI semiconductor revenue in Q2 FY2026 expected to reach 10.8 billion dollars, a year-on-year growth of 143%, indicating that AI ASIC/XPU demand has become a core growth curve for Broadcom Inc. On the other hand, all GPU, TPU, and ASIC routes cannot escape high-speed Ethernet switching and optical interconnect, with Broadcom Inc.'s Tomahawk 6 achieving a single-chip 102.4Tbps switching capacity and demonstrating 102.4T Ethernet, CPO, 400G/lane optical DSP core devices, PCIe Gen6 and other AI interconnect solutions at OFC 2026, strategically positioning itself at the bottleneck of AI data centers transitioning from "single-chip compute" to "thousands/network clusters of compute efficiency". The bottleneck of AI data centers is expanding from single-card computing power to cluster interconnects, East-West traffic, power efficiency, optical module power consumption, and network stability, which is where Broadcom Inc.'s strategic stronghold lies. While a single chip determines the upper limit of computing power, the real efficiency of a thousand cards, tens of thousands of cards, and even gigawatt-level AI clusters depends on whether there is enough bandwidth and low power consumption communication between chips, within AI data centers' internal server racks, and between multiple data centers; this is where the strategic value of Broadcom Inc.'s Ethernet switches, CPOs, optical DSP, and network silicon photonics technology lies. Therefore, Broadcom Inc.'s latest stock price is around $382.07, with a market capitalization of approximately $1.82 trillion. Data compiled from multiple research platforms show that Wall Street's average target price for Broadcom Inc. corresponds roughly to a market capitalization of $2.23 trillion to $2.46 trillion; the most optimistic target price of $630 almost reaches the $3 trillion market cap club. MarketBeat's statistics include 32 analysts, with an average target price of $493.24, the highest being $582; TipRanks' statistics cover nearly 3 months with 27 analysts, an average target price of $516.91, the highest being $630; Zacks' statistics have 37 analysts, an average target price of $469.95, the highest being $630. Representative analyst Tristan Gerra, a senior analyst at Robert W. Baird who gave the most optimistic target price of $630, focuses on three key bullish points: first, Broadcom Inc.'s AI-related revenue guidance for 2026-2027 is stronger than market expectations, driven by volume from multiple AI clients; second, Broadcom Inc. has platform-level advantages in custom AI ASICs, Ethernet switch chips, and data center optical interconnects; third, VMware's software assets provide cash flow and profit margin support, making Broadcom Inc. not just a "AI chip elastic stock" but a composite type AI infrastructure company with "AI ASIC + network ++ data center optical interconnect + enterprise software cash flow".