Broadcom Shares Climb as IBM's Hardware Hint and Morgan Stanley's TPU Call Steady the Mood

Broadcom equity found support this week from two distinct forces: a sector rotation triggered by IBM's early earnings warning and a Wall Street analyst's robust defense against fears that MediaTek is eating into the company's most prized artificial-intelligence contract. The shares gained 0.57 percent to EUR 342.45 on Wednesday, building on a 2.85 percent advance from the prior session that brought the close to EUR 340.50. Year to date, the stock has risen 15.44 percent.

The rotation began after IBM pre-released disappointing second-quarter figures. Chief Executive Arvind Krishna said enterprise clients are shifting budgets away from software and toward physical infrastructure — specifically storage, memory, and server hardware — in an effort to lock down capacity before prices for AI infrastructure climb further. Capital flowed out of software names and into hardware plays, with Broadcom among the beneficiaries. The stock ended Tuesday's US session at $389.32, up over 1 percent, even as the broader technology sector struggled. Morgan Stanley also reinforced its overweight rating that day, adding another catalyst.

The real cloud over Broadcom had been the MediaTek question. For weeks, investors worried that the Taiwanese chipmaker might steal a large chunk of Broadcom's share of Google's Tensor Processing Unit (TPU) business. Morgan Stanley analyst Joseph Moore pushed back, arguing that the fear was overblown. He sees Broadcom maintaining roughly 80 percent of the TPU market over the long run. MediaTek's entry is "real but not disruptive," Moore wrote, and he called predictions of Broadcom's share dropping to 50 percent or lower "premature." He drew a parallel to last year's alarm that Marvell and Alchip might push Broadcom out of Amazon's Trainium chip — a concern that proved exaggerated. Morgan Stanley's Taiwan team noted that MediaTek will still need CoWoS packaging capacity for 2-nanometer TPU production, while the alternative EMIB packaging technology remains unproven at the scale Google requires. MediaTek's own long-term strategy targets just 15 to 20 percent of the TPU business, consistent with Moore's 80 percent estimate for Broadcom.

Should investors sell immediately? Or is it worth buying Broadcom?

Despite the upbeat view, insider selling has caught the market's attention. Chief Legal and Corporate Affairs Officer Mark David Brazeal sold 25,000 shares on July 10, collecting roughly $10 million. He now holds 194,989 shares, including 123,750 restricted stock units. Separately, hedge fund Cypress Funds LLC, led by Steven Baum, trimmed its Broadcom position by 29,088 shares. These moves, however, have not derailed the broader institutional support.

Technically, the stock sits 20.29 percent below its 52-week high of EUR 429.60 hit on June 3, and 44.46 percent above the 52-week low of EUR 237.05 from July 2025. It is trading 2 percent under the 50-day moving average of EUR 349.43 but 9.24 percent above the 200-day moving average of EUR 313.47 — a pattern that suggests the long-term uptrend is intact even as short-term momentum wavers. The 30-day annualized volatility stands at nearly 50 percent, and the relative strength index at 51.5 places the stock in neutral territory.

Looking ahead, the debate over Broadcom's TPU position is unlikely to fade until Google reveals how it will split development of the next-generation chip between Broadcom and its Taiwanese rival. Morgan Stanley's Moore sees Broadcom remaining the primary supplier, with AI revenue reaching roughly $120 billion by fiscal 2027 — about $80 billion of that from TPUs. The TPU share of total AI revenue would dip to around 60 percent, but only because new ASIC customers will add incremental volume, not replace existing orders. For now, Broadcom occupies the number-two spot on Morgan Stanley's coverage list among AI compute plays, just behind Nvidia, and the market appears to be weighing the long-term fundamentals against short-term technical noise.

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