"Google Chain" is on fire! Google surged 6%, Broadcom skyrocketed 11%

With the resurgence of artificial intelligence trading, the capital market is rapidly rallying around the "Google chain."

On Monday, driven by the strong performance of Alphabet, Google's parent company, Broadcom, a key chip partner, saw its stock price soar, with both companies contributing to a rebound in the tech sector, indicating that investors are reassessing the enormous potential of the application-specific integrated circuit (ASIC) market and Google's ability to counterattack in the AI field.

Broadcom's stock closed up 11.1% on Monday, marking its best single-day performance since April 9, and becoming the top performer in the S&P 500 index; Alphabet's stock also rose over 5% during the same period. This market trend is not just a correlation in stock prices but is also corroborated by industry insights: OpenAI CEO Sam Altman recently acknowledged in an internal memo that Google's latest advancements in AI could pose "temporary economic headwinds" for OpenAI and that it is facing unprecedented competitive pressure.

According to The Information, Altman candidly told employees that Google's recent work in areas like AI pre-training has been impressive, and the narrowing of its technological lead means that the external environment will become "quite challenging" for a while. Meanwhile, Goldman Sachs traders noted that the market had previously been slow to react to Google's advancements with Gemini compared to ChatGPT, indicating a pricing error.

As capital flows undergo significant changes, the market is shifting from OpenAI-related targets to the "Google chain." Goldman Sachs trading desk data shows that a portfolio centered around Alphabet and Broadcom is demonstrating a strong substitution trend against the "OpenAI chain," represented by companies like Microsoft and Oracle, as investors are re-betting on Google's robust cloud infrastructure and its self-developed chip ecosystem.

The "Rediscovery" of the ASIC Market

The surge in Broadcom's stock price directly reflects investors' optimistic expectations for the demand for application-specific integrated circuits (ASICs).

As one of the largest suppliers of ASICs for hyperscale computing centers, Broadcom's stock has risen 60% this year. CNBC points out that Broadcom is closely linked to Alphabet through its ASIC business, assisting in the design and manufacturing of Google's Tensor Processing Units (TPUs). These chips are core to Google's internal AI infrastructure and are seen as strong competitors to Nvidia's Graphics Processing Units (GPUs) in the AI workload domain.

Wall Street analysts have recently raised their ratings on Broadcom, believing it is at a critical turning point. Jefferies analyst Blayne Curtis noted that as the number of tokens processed by Google surges, ASIC production will become more significant in 2026 to 2027, especially against the backdrop of rising computational demands from multimodal modelsHe views Broadcom as a preferred stock and has raised the target price to $480.

Dan Ives from Wedbush Securities stated that the market is "rediscovering" the huge market for ASIC chips. He believes that Google is primarily leading this trend, and Google TPU is one of the most mature ASIC chips on the market. Melius Research analyst Ben Reitzes also emphasized that Google has been collaborating with Broadcom on custom chips since 2016, which has now developed to the seventh generation. This long-term partnership is translating into Broadcom's AI revenue growth and Google Cloud's business growth.

OpenAI Acknowledges Google's "Technological Catch-Up"

While the capital market votes with its feet, OpenAI internally also feels the chill from Google.

According to information compiled by The Information and Bloomberg, OpenAI CEO Sam Altman warned in an internal memo in October that a series of actions by Google, including the launch of Gemini 3, the upcoming seventh-generation TPU "Ironwood," and the new agent platform "Google Antigravity," indicate that it seems to have made breakthroughs in its development approach.

Altman specifically mentioned Google's success in pre-training, acknowledging that this is an area where OpenAI once struggled to make progress and where Google also faced difficulties. He stated that Google's latest advancements could bring temporary economic pressure to OpenAI. In addition to Google, OpenAI is also facing fierce competition from Anthropic. Reports suggest that Anthropic, which was founded only four years ago, may exceed OpenAI in AI sales to developers and enterprises this year.

Although ChatGPT still leads in usage and revenue over Google's Gemini chatbot, Altman admitted that the gap is narrowing. This has forced OpenAI to allocate more resources to research inference models and attempt to fix flaws in the pre-training process in a new model codenamed Shallotpeat to maintain its technological lead.

Dramatic Financial Disparity

In addition to the competition on the technical front, Google's significant financial advantage is also a key reason why investors are turning to the "Google chain."

Compared to the massive cash burn that OpenAI faces in pursuing general artificial intelligence—expected to exceed $100 billion in the coming years and requiring frequent capital raises—Google has demonstrated robust financial resilience. With a valuation of $3.5 trillion, Google generated over $70 billion in free cash flow in just the past four quarters.

Moreover, Google has a thriving cloud business, even renting servers to competitors including OpenAI and Anthropic. Goldman Sachs trader Mike Wilson believes that the market must recognize the significant progress Google has made with Gemini, as the previous market pricing of this advancement was clearly incorrect. With Google's comprehensive strength demonstrated in AI models, infrastructure chips (such as the TPU developed in collaboration with Broadcom), and financial self-sustainability, investors are inclined to believe that the "Google chain" offers a more attractive investment return at this stage