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Exclusive Content Google and Meta Just Rewrote Broadcom's AI Story—While Shares DropAuthored by Leo Miller. Posted: 2/8/2026. 
Quick Look- Artificial intelligence semiconductor leader Broadcom has seen a big-time drop in its share price since December.
- At the same time, some of the firm's largest customers plan to ramp up their AI spending much more than anticipated.
- Together, these dynamics provide significant support to the outlook on Broadcom shares.
Early in 2026, shares of semiconductor giantBroadcom (NASDAQ: AVGO) are continuing the negative trajectory that characterized the end of 2025. As of the Feb. 5 close, AVGO is down about 10% year-to-date and roughly 23% since the company last reported earnings on Dec. 11, 2025. Still, CapEx outlooks from major U.S. hyperscalers make this pullback look like an opportunity. With hyperscaler capital expenditure (CapEx) guidance coming in much higher than anticipated, Broadcom's prospects look brighter despite the sell-off. Broadcom's Top Customer Blows CapEx Forecasts Out of the WaterHyperscaler CapEx is a key indicator for Broadcom because it approximates the company's potential AI semiconductor revenue. Consider Broadcom's largest chip partner, Google parent company Alphabet (NASDAQ: GOOG). Alphabet reported earnings on Feb. 4 and provided its 2026 CapEx guidance, saying it expects to spend between $175 billion and $185 billion on CapEx. At the midpoint, that implies roughly a 97% increase versus the firm's 2025 CapEx of $91.4 billion. That matters for several reasons. First, the guidance massively exceeded expectations of roughly $120 billion, which had implied only about 31% spending growth. Because Broadcom's revenue growth expectations are heavily tied to Google's CapEx, stronger-than-expected spending should push Broadcom revenue estimates higher. Second, Google's CapEx rose 74% in 2025 from $52.5 billion in 2024. By signaling a further 97% increase in 2026, Alphabet is showing that its AI spending growth is accelerating — good news for Broadcom, one of the market's top beneficiaries of Google's AI investments. Notably, Broadcom shares rose about 1% on Feb. 5, one day after Google's earnings release, as investors took notice of the linkage. Still, that gain is small compared with AVGO's steep decline over recent months. META's CapEx Comes in Hot, Signals Increasing Use of MTIACapEx guidance from Meta Platforms (NASDAQ: META) further supports the bullish case for Broadcom. While the partnership has not been formally detailed, it is widely believed Meta has a large relationship with Broadcom through Broadcom's co-development of Meta's Training and Inference Accelerator (MTIA). In its latest earnings, Meta said it expects to spend between $115 billion and $135 billion on CapEx in 2026, comfortably above expectations of about $110 billion. At the midpoint, that implies CapEx growth of roughly 73% — a modest deceleration from 84% growth in 2025, but still a very high rate. This level of spending provides additional support for Broadcom's outlook and raises the possibility that Broadcom could capture a larger share of Meta's spending than in the past. In Q1 2026, Meta said it will "extend our MTIA program to support our core ranking and recommendation training workloads in addition to the inference workloads it currently runs." That means Meta plans to start using MTIA for model training as well as inference. For Broadcom, that is a clear positive: broader use of MTIA implies increased demand as Meta extends the chip's use cases. It also signals that MTIA is becoming a strategically important asset for Meta, increasing the likelihood of continued co-development with Broadcom for years to come. For context, Google is currently deploying the seventh generation of its Broadcom co-developed tensor processing units (TPUs), while Meta has deployed only the second generation of MTIA. Broadcom's Outlook Improves as Shares FallTaken together, these developments strengthen the bullish case for Broadcom shares. The stock is trading at a forward price-to-earnings (P/E) ratio near 30x, which is about 19% below its 52-week average forward P/E. Additionally, the consensus price target on Broadcom is near $437, implying roughly 41% upside from current levels. Considering the hyperscaler CapEx backdrop and Broadcom's strategic partnerships, the shares look appealing at these prices.
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