Cloud spending on AI is turning into a land grab, and one major supplier just tightened its hold on an important piece of the puzzle. Alphabet's (GOOGL) Google Cloud has launched a new network monitoring service called Cloud Network Insights, powered by AppNeta technology from longtime partner Broadcom (AVGO).
This partnership faced a brief shake recently when Google was reported to be in talks with rival Marvell (MRVL) for certain custom AI chip work, sparking short-term concerns that some AI business could shift. However, Broadcom has now confirmed a deeper relationship with Google Cloud through this expanded collaboration.
Broadcom now sits at the center of the story. This stronger tie with a top cloud platform comes alongside its long-term AI chip deals with other Big Tech names and brings a clear question into focus. As Broadcom strengthens its Google Cloud links and becomes more embedded in the core of AI computing, should AVGO stock be seen as a buy now? Or is waiting still the smarter move? Let’s take a closer look.
Broadcom’s Rich Numbers
Broadcom is a semiconductor and infrastructure technology company based in Palo Alto, California. The firm sells chips and software used in data centers, networking, broadband, and many enterprise systems.
AVGO stock trades near $418 as of this writing, with shares up 21% year-to-date (YTD) and 117% over the past 52 weeks.
Broadcom is worth approximately $2 trillion by market capitalization and sends some cash back to shareholders through a forward annual dividend of $2.60 per share, which works out to a modest 0.65% yield.
Broadcom's price tag is well above the usual range for the sector, with AVGO stock at 31 times sales versus a median of 3.5 times and 54.5 times price‑to‑cash‑flow against roughly 19 times. That shows just how rich the AI story has become.
The latest quarterly report showed how the business is backing up that kind of valuation. The company delivered non-GAAP EPS of $2.05 and showed sales of $19.31 billion, up more than 7% from the prior quarter and 29% year-over-year (YOY), which points to steady demand for its chips and software. Broadcom also posted net income of $7.35 billion for the same stretch, down almost 14% quarter-over-quarter, hinting at higher costs, product mix changes, or integration spending as AI and cloud deals ramp.
Broadcom still generated $8.26 billion in operating cash flow in the January 2026 quarter and ended in a negative net cash flow of $2 billion, a hefty swing that likely reflects heavier spending on capex, deals, and cash returns while the company leans into the next leg of AI growth.
Broadcom’s AI Deals Tighten Its Grip
Broadcom’s growth story around Google Cloud starts with a simple point. On April 22, the company expanded its collaboration with Google Cloud through the launch of Cloud Network Insights, a new service powered by Broadcom's AppNeta that delivers end-to-end visibility and performance monitoring across hybrid, multi-cloud, and agentic AI environments. This software win sits alongside an expanded deal with Meta Platforms (META) through 2029 for multiple generations of MTIA accelerators, with an initial commitment of over 1 gigawatt of capacity.
On the software and platform side, Broadcom introduced Tanzu Platform Agent Foundations on April 15 for VMware Cloud Foundation. The new offering provides a secure, PaaS-style runtime designed to help enterprises build, govern, and scale AI agents in production.
Anthropic also reinforces the thesis. In early April 2026, the AI lab signed a deal for 3.5 gigawatts of next-generation Google TPUs, with Broadcom playing a key role in design and networking integration.
Together, these moves all give Broadcom deeper visibility into AI infrastructure spending across both silicon and software, strengthening its position as a critical partner in the hyperscaler buildout.
Wall Street Bets Big on Broadcom
Wall Street is lining up Broadcom’s next big check on its fast-growing AI plans. The next earnings update is due on June 4, and the current estimate for the April 2026 quarter sits at $2.02 per share versus $1.33 a year earlier, pointing to a strong 52% jump in EPS.
Analysts see plenty of room for the story to keep building. Benchmark analyst Cody Acree recently kept a $485 target on AVGO stock with a “Buy” rating, linking that view directly to the Meta AI chip deal and a wider AI roadmap. The analyst believes Broadcom has a real chance to pull in well above $100 billion in AI chip revenue during its upcoming fiscal year, helped by long-running custom programs.
The wider group on the Street is mostly pulling in the same direction. The 42 analysts covering AVGO stock offer a consensus “Strong Buy" rating, even though some are more cautious than others. The average 12-month target is $469.94, which implies 12% potential upside from here.
Conclusion
Broadcom still looks like a buy for people who are comfortable paying a premium for solid AI exposure built on growing ties with Google Cloud and Meta. The expanded Google Cloud deal, the AI chip agreement that runs through 2029, and expectations for AI chip revenue well above $100 billion all point in the same direction. AVGO stock has become a main way to tap into Big Tech AI spending rather than a small side trade. Over the next year, the shares seem more likely to drift higher with normal pullbacks than to fall into a lasting slump.
On the date of publication, Ebube Jones did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
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