Broadcom (AVGO) is trading at around $354 per share, up roughly 2% year-to-date, as two major developments pull investor attention in opposite directions.
On one hand, reports surfaced that Broadcom is in talks with Blackstone (BX) and Apollo Global Management (APO) to raise more than $60 billion in debt. The financing is tied to AI infrastructure projects linked to Anthropic. The deal could include a $30 billion junior debt tranche alongside a senior-secured portion.
That is a large number, and Wall Street noticed.
On the other hand, Google recently expanded its AI chip partnership with Marvell (MRVL), a direct competitor. As part of the deal, Google received a warrant to buy up to 58.97 million Marvell shares at $206.58 each. Reuters reported the arrangement could support up to $120 billion in Marvell revenue if Google hits all purchase targets through fiscal year 2033.
Marvell jumped nearly 8% on the news. Broadcom dropped more than 5%.
Broadcom has its own answer to the Marvell news: OpenAI. The two companies are developing a chip called Jalapeño, built for AI inference tasks.
On August 25, OpenAI published early performance results. The chip delivered 1.5 to 1.9 times more AI work per watt at peak throughput compared to rival systems. It also posted 1.7 to 3.6 times lower end-to-end latency.
OpenAI plans to deploy Jalapeño at gigawatt scale as part of a multi-generation system. That gives Broadcom a large, recurring AI customer alongside its existing hyperscaler relationships.
The financials are hard to argue with. Q2 fiscal 2026 revenue came in at $22.2 billion, beating analyst estimates of around $22.1 billion. AI semiconductor revenue reached $10.8 billion, up 143% year-over-year. Infrastructure software added $7.2 billion, up 9%.
Non-GAAP diluted EPS was $2.44, ahead of the $2.40 consensus. Free cash flow hit $10.3 billion, representing 46% of revenue. Adjusted EBITDA was $15.2 billion, or 69% of revenue.
Management guided Q3 revenue to approximately $29.4 billion, an 84% year-over-year increase. AI semiconductor revenue for Q3 is expected at $16 billion, up 200% year-over-year.
For the full fiscal year, management expects $56 billion in AI semiconductor revenue. The company is also projecting more than $100 billion in AI chip revenue by fiscal 2027.
Of the 42 analysts covering AVGO, 33 rate it Strong Buy, three rate it Moderate Buy, and six have a Hold. The average price target sits at around $510, implying roughly 43% upside from current levels.
Marvell’s average analyst target stands at $290.80, implying about 18.7% upside.
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