Alphabet's move to sell TPU systems directly to clients creates a new revenue stream, while Broadcom benefits from surging demand for its custom AI chips and networking hardware.
Broadcom's AI semiconductor revenue is accelerating sharply and the company supplies custom TPUs and networking for Google, with the article calling the stock attractive at about 18 times forward earnings.
Alphabet is beginning to sell TPUs to customers and cloud revenue is accelerating, though the article notes TPU sales are still small and capex is being raised.
Alphabet has begun selling its custom tensor processing units (TPUs) directly to customer data centers, marking a strategic shift in its AI infrastructure business. Broadcom, which supplies the underlying semiconductor technology and networking components, is seeing accelerated revenue growth as it supports these deployments through 2031.
While Alphabet continues to rent TPU capacity via Google Cloud, it has now begun selling the physical TPU systems directly to customers for use in their own data centers.
Broadcom develops and supplies the custom TPUs and networking components for Google's AI racks, securing a long-term partnership that extends through 2031.