$Broadcom(AVGO.US)

Google (Alphabet) just released its Q4 2025 earnings report.

This time, Google delivered a report that sent Broadcom investors into a frenzy. Here's why Broadcom rose on Google's earnings:

1. Google Cloud's Stellar Growth

Google's report showed its cloud revenue grew 35.9% YoY, far exceeding market expectations.

Implications for Broadcom: The better Google Cloud performs, the greater the demand for supporting hardware. One of Google Cloud's core advantages is its custom TPU (Tensor Processing Unit) for AI.

2. Broadcom - The Hidden Force Behind TPUs

It's an open secret: Every generation of Google's TPU chips are co-designed by Broadcom, which provides core technologies.

Google hinted in its report and earnings call that to meet training demands for models like Gemini 3, it will "significantly increase" capital expenditures (Capex) in 2026.

As Google continues spending on its TPUs, Broadcom - as the sole manufacturer and design partner - essentially gets a "ticket to the money printer."

3. Wall Street's Reality Check

Earlier concerns about Wall Street being harsh on cloud providers (evident in Google's volatile after-hours stock due to spending worries) gave way to a smarter realization:

Regardless of cloud providers' eventual profitability, they must now aggressively buy Broadcom's chips and networking gear to stay competitive.

Thus, money flowed from "uncertain" cloud players (Google, Amazon) to the "recession-proof" equipment supplier (Broadcom).