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

As the artificial intelligence trading battle reignites, capital markets are quickly converging towards the "Google chain."

On Monday, buoyed by the strong performance of Google parent company Alphabet's stock, Broadcom, as its key chip partner, saw its share price soar. Together, the two drove a rebound in the tech sector, indicating that investors are reassessing the massive potential of the custom chip (ASIC) market and Google's ability to counterattack in the AI field.

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

According to The Information, Altman confided to employees that Google's recent work in AI pre-training and other areas has been impressive, and the narrowing of the technical lead means external conditions will become "rather difficult" for a period. Meanwhile, Goldman Sachs traders have pointed out that the market previously underreacted to advancements in Google’s Gemini relative to ChatGPT, suggesting a pricing error.

With a significant shift in capital flows, the market is moving from OpenAI-related targets to the "Google chain." Data from Goldman Sachs trading desks show that portfolios centered on Alphabet and Broadcom are showing a strong trend of replacing the "OpenAI chain," represented by Microsoft, Oracle, and others. Investors are rebasing their bets on Google's powerful cloud infrastructure and its self-developed chip ecosystem.

“Rediscovery” of the ASIC Market

Broadcom's surge in stock price directly reflects investors' optimistic expectations for custom chip (ASIC) demand.

As one of the largest suppliers of large-scale data center ASICs, Broadcom's stock has already risen 60% this year. CNBC notes that Broadcom is closely tied to Alphabet through its ASIC business, assisting in designing and manufacturing Google’s Tensor Processing Units (TPUs). These chips are at the heart of Google’s internal AI infrastructure and are seen as strong competitors to Nvidia GPUs in the AI workload arena.

Wall Street analysts have recently raised Broadcom’s ratings, believing it is at a critical turning point. Jefferies analyst Blayne Curtis pointed out that as the number of tokens processed by Google surges, ASIC output will become more prominent in 2026-2027, especially as multimodal models continue to increase in computational demands. He regards Broadcom as the top pick and has raised the target price to $480.

Dan Ives of Wedbush Securities says the market is “rediscovering” the immense market potential of ASIC chips. He believes Google is mainly leading this trend and that the Google TPU is one of the most mature ASIC chips on the market. Ben Reitzes of Melius Research also emphasized that Broadcom and Google have been collaborating on custom chips since 2016, now reaching the seventh generation; this long-term partnership is translating into Broadcom’s AI revenue growth and Google Cloud’s business growth.

OpenAI Admits Google’s “Technical Catch-up”

While capital markets vote with their feet, OpenAI internally is also feeling 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 Google's launch of Gemini 3, the upcoming seventh-generation TPU "Ironwood," and the new agent platform "Google Antigravity," together signal possible breakthroughs in Google's development approach.

Altman specifically mentioned Google’s successes in pre-training, admitting this was an area where OpenAI had struggled to make progress and where Google had also faced difficulties. He stated that Google's latest advances could bring temporary economic pressure to OpenAI. In addition to Google, OpenAI is also facing fierce competition from Anthropic. Reportedly, Anthropic, founded just four years ago, may surpass OpenAI in AI sales revenue to developers and enterprises this year.

Although ChatGPT still leads Google’s Gemini chatbot in usage and revenue, Altman admits the gap is narrowing. This is forcing OpenAI to shift more resources towards inference model research and attempt to fix flaws in the pre-training process with a new model code-named Shallotpeat, to maintain technological leadership.

Stark Contrast in Financial Strength

In addition to competition on the technology front, Google's huge financial advantage is also a major reason investors are shifting to the "Google chain."

Compared to OpenAI’s pursuit of artificial general intelligence, which is expected to consume over $100 billion in the coming years and requires frequent capital raising, Google has displayed robust financial resilience. With a valuation of $3.5 trillion, Google generated over $70 billion in free cash flow in the past four quarters alone.

Moreover, Google has a booming cloud business and even rents out servers to competitors such as OpenAI and Anthropic. Goldman Sachs trader Mike Wilson believes that the market must face Google’s significant progress with Gemini; previous pricing of this advance was clearly wrong. As Google demonstrates comprehensive strengths in AI models, infrastructure chips (like the TPUs made in cooperation with Broadcom), and financial capability, investors increasingly believe the “Google chain” now offers a more attractive investment return profile.

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