AVGO: Stock Price Explodes – Is It the Next NVDA, or Just Riding the AI Wave?

It’s always the same damn story, isn’t it? Another Monday, another "AI rally." This time around, it’s Broadcom’s (AVGO) turn to get tossed into the mosh pit of market enthusiasm, shares spiking a cool 11.1% and making it the S&P 500’s golden child for a day, as Broadcom is joining Alphabet in the AI rally. Why investors are jumping in. Why? Because Wall Street, in its infinite wisdom, has finally, finally, decided that Broadcom is a "derivative play" on Alphabet’s (GOOGL) AI dominance. Give me a break.

The 'Discovery' of Something That's Been There Since Forever

Let’s be real. This isn't some fresh-baked revelation. Broadcom, the chipmaker that makes those super-specific ASICs for the big boys, has been doing its thing with Google since 2016. That’s right, 2016. We’re talking about their seventh generation of these custom chips, the Tensor Processing Units (TPUs) that Google uses to power its own internal AI machine. So when Melius Research's Ben Reitzes, bless his heart, tells clients the "decision to develop this product early is now starting to inflect to the upside," I gotta ask: what in the actual hell were we doing for the last eight years? Counting our toes?

It’s like finding out your neighbor, who’s been driving a beat-up pickup truck for a decade, suddenly "discovers" it has an engine. No, pal, it’s always had an engine. The market just decided today was the day it mattered. Reitzes even says the TPU is "the most proven ASIC out there" next to Nvidia’s (NVDA) GPUs. Proven! For years! But now, now it has "tangible momentum." My eyes just about rolled out of my head. We’re not witnessing a new dawn, folks; we’re just watching the same old sun rise again, but this time with a fresh coat of "AI" paint on it. It’s a classic case of the market chasing its own tail, isn't it?

Riding Google's Coattails, Or Just Hanging On For Dear Life?

So, Broadcom’s (AVGO) stock price jumps because it’s supplying Google (GOOGL) with these custom chips. On the surface, that sounds great. A solid partnership, a lucrative niche. But let's pull back the curtain a bit. Being a "derivative play" means you’re basically a barnacle clinging to a bigger ship. If that ship hits an iceberg, you’re going down with it, no matter how shiny your shell is. And let’s not forget, Google's TPUs are competitors to Nvidia’s (NVDA) GPUs. It’s a high-stakes poker game, and Broadcom is essentially the guy making the chips for one of the players. Good work, if you can get it, but it’s not exactly inventing the game.

I can just picture it: a sterile lab in San Jose, California, back on September 5, 2025. A Broadcom circuit board for chip testing, humming quietly, oblivious to the impending madness. There it sits, a marvel of engineering, a testament to years of quiet, meticulous work. And then boom, some analyst decides it's "news" that this thing, which has been doing its job for nearly a decade, is suddenly worthy of pumping avgo stock. It ain't about the tech, folks, it’s about the narrative. It’s about who’s got the loudest megaphone on Wall Street. And right now, the AI megaphone is deafening.

Maybe I’m just a cynic, but this whole "AI rally" feels less like a sustainable growth story and more like a game of musical chairs. Everyone’s scrambling for a seat, any seat, as long as it has "AI" stamped on it. Broadcom, with its impressive 60% year-to-date rally, is certainly enjoying the ride. But how long can you ride the coattails of a narrative before someone asks if you can actually fly on your own? And what happens when the collective attention span of the market shifts to the next shiny object? Because offcourse, it always does. Then again, maybe I'm just old-school, clinging to the idea that value should be discovered, not just declared...

The Emperor's New Chips?

Look, Broadcom makes good stuff. No doubt about it. But this sudden explosion of "enthusiasm" isn't about some groundbreaking new invention that just dropped last week. It's about analysts and investors finally deciding to notice something that's been quietly chugging along for years, and then slapping the "AI" label on it to justify a feeding frenzy. It's not a revelation; it's a re-packaging. And in this market, that's often all it takes to send a stock soaring. Just don't ask me how long the music's gonna play.