Broadcom May Be the Biggest Winner From Alphabet's Earnings

Summary

Magnificent Seven giant Alphabet NASDAQ: GOOG just reported its latest financial results, but the company’s earnings have implications for more than Alphabet itself. Broadcom Today$381.92 -10.55 (-2.69%) As of 07/24/2026 04:00 PM Eastern52-Week Range$281.61▼$495.00Dividend Yield0.68%P/E Ratio63.65Price Target$493.24 Broadcom NASDAQ: AVGO has some of the clearest ties to Alphabet, having helped the firm develop its tensor processing units (TPUs) for years. Amid this, Alphabet is widely considered to be Broadcom’s largest AI chip customer.Get Broadcom alerts:Sign Up In turn, what Alphabet is seeing from a demand perspective and the spending it forecasts has meaningful consequences for Broadcom. While Alphabet shares tumbled after releasing its results, it's hard not to take the company’s numbers as positive indicators for the world’s second-largest semiconductor company. Alphabet’s Capital Expenditures Soar, Guidance Gets a BoostThe first notable metric to highlight is Alphabet’s capital expenditure (CapEx) and its CapEx forecasts. Alphabet’s CapEx in Q2 was $44.9 billion. This equated to an increase of 100% year-over-year (YOY) and a 26% increase quarter-over-quarter. The company notes that the vast majority of this spending went toward infrastructure to support its AI investments. Alphabet’s rapidly increasing AI infrastructure spending is a strong positive indicator for Broadcom. Much of that increased spending goes toward the TPUs Broadcom helps develop, as well as its networking chips. More importantly, Alphabet also raised its full-year CapEx guidance. Its CapEx forecast now sits at $195 billion to $205 billion. At a midpoint of $200 billion, this is approximately 8% higher than the company’s previous midpoint CapEx guidance of $185 billion. This increase raises the ceiling of revenue that Broadcom could generate in 2026. Additionally, Alphabet is now near the top of the heap in planned hyperscaler CapEx for 2026. Amazon.com NASDAQ: AMZN expects to spend $200 bi...