Broadcom Just Named Its Next AI Customer. It Isn’t Google.

Broadcom Inc. affiliate D95GT, LLC plans to sell 631,972 common shares, valued at $225M, on or around September 23, 2026, according to a regulatory filing. The shares are 'Founders Shares' acquired in 1991, with Northern Trust Securities, Inc. acting as broker. The sale is subject to Rule 144 regulations.

Broadcom (AVGO) stock fell 0.3% premarket after a Financial Times report stated Chinese authorities are auditing its networking hardware in state-backed data centers, aiming to reduce reliance on foreign tech. The survey found Broadcom switches may account for 90% of hardware used by state-owned firms, potentially leading to reduced usage. Huawei and other Chinese suppliers could benefit. Retail sentiment on AVGO remains bearish.

Chinese authorities are reviewing Broadcom's hardware in state-backed data centres, with potential informal guidance to follow. Broadcom's switches account for up to 90% of equipment in some centres, raising concerns about dependency. The company's China revenue exposure is significant, particularly in its core networking switches segment. Potential domestic alternatives include Huawei, H3C Technologies, and Ruijie Networks.

China is reviewing Broadcom switches in state data centres, with findings suggesting up to 90% usage in some facilities. This aligns with Beijing's push to reduce reliance on foreign tech. Broadcom, Nvidia, and Huawei are major suppliers. Potential beneficiaries include Huawei, H3C, and Ruijie Networks. No formal ban is confirmed, but informal guidance may shift spending to domestic suppliers.

Bernstein analysts maintain bullish views on Nvidia (NVDA) and Broadcom (AVGO), citing strong growth prospects and attractive valuations. They set price targets of $400 for Nvidia (75% upside) and $575 for Broadcom (58% upside). Both companies trade at lower P/E ratios compared to their 5-year averages, suggesting potential cushion against AI sentiment weakness. Nvidia and Broadcom executives also expressed confidence in sustained AI demand.

AMD reached a $1 trillion market cap as shares rose 9.6% to $613.31 on Sept. 21, driven by AI demand. The company is positioning itself as a key competitor to Nvidia in AI infrastructure, with shares up 185% in 2026. AMD's forward earnings multiple is 41, reflecting high growth expectations.