Google’s new capex guidance is music to Broadcom’s ears
The hyperscalers’ capex outlooks are the AI chip designers’ earnings outlooks.
To that end, Alphabet boosted its outlook for capital expenditures in 2025 to about $85 billion in its release of Q2 earnings. That’s well above its previous guidance for $75 billion and the Street’s call of $73.3 billion.
Shares of Nvidia are building on today’s gains in the after-hours session, but the real standout is Broadcom, which is up more than 3% since the market closed.
Alphabet has been called Broadcom’s “longest-standing AI chip partner” and is a big buyer of its custom processors.
Sound familiar? It should. Broadcom caught a huge bid in the wake of Alphabet’s Q4 earnings, released in February, for the exact same reason.
“AI is positively impacting every part of the business, driving strong momentum,” Alphabet CEO Sundar Pichai said in the Q2 release.
Well, when something’s positively impacting everything else, you’re probably willing to spend even more on it.
Especially when recent tax tweaks are going to give you more near-term cash to support that investment!
