Broadcom's AI Revenue Just Doubled to $8.4 Billion. Is This the Most Underrated Artificial Intelligence (AI) Stock of 2026?

You may have heard about Google's parent company Alphabet's tensor processing unit (TPU) in the news.

The chip represents one of the first real potential competitors to Nvidia's graphics processing unit (GPU) and its dominance in the artificial intelligence (AI) hardware space.

But I find many of those headlines leave out Alphabet's partner for the TPU, Broadcom (NASDAQ: AVGO) and that's something of a mystery to me considering Broadcom's incredible growth figures.

So, here's why it might be one of the most underrated stocks to consider for your portfolio this year.

Image source: Getty Images.

Howdy, partner

Google and Broadcom's TPU, currently in its seventh iteration, is dubbed Ironwood. And Broadcom has been Google's design partner on it since the beginning.

See, for all Google's prowess as a software company, its hardware expertise is far more limited, so it didn't look to develop the TPU in-house.

Instead, it has worked with Broadcom, which does much of the design work by taking Google's specifications and turning them into a chip design capable of meeting its needs. Taiwan Semiconductor Manufacturing does the final fabrication but the chip is Broadcom hardware.

And Google isn't the only company that relies on Broadcom for its chip designs. It designs custom chips for Anthropic, the company behind Claude.

Late last year, Broadcom revealed that the customer that placed a $10 billion order for TPUs was, in fact Anthropic. And a few months later, Broadcom revealed that Anthropic had placed another $11 billion order.

That was likely part of Anthropic's stated goal of adding 1 million TPU chips to its computing capacity over the course of 2026, which is sure to benefit Broadcom.

Late last year, Broadcom was in talks with Microsoft to do some chip design for it, and it is also working with Anthropic's rival OpenAI to design custom chips to meet its needs.

In that way, Broadcom is a bit like Taiwan Semiconductor in that it's a behind-the-scenes chip player that lots of major companies making the headlines rely upon. And it's a pretty good place to be if Broadcom's latest results are any indication.

Designer chips, fantastic growth

Up first, the number in the headline. Per Broadcom's Q1 2026 results (released March 4, 2026), the company saw its AI revenue for the quarter more than double (up 106%) to $8.4 billion.

Total revenue for the quarter was $19.31 billion, up 29% over Q1 2025 and Broadcom's diluted earnings per share (EPS), came in at $1.50, up 32% over Q1 2024.

Finally, the company has a spectacular net profit margin of 36.57% and a healthy balance sheet with a debt-to-equity ratio of 0.83.

So, as if the company's incredible presence in the AI hardware space didn't already make a strong case for it, Broadcom's solid financial position and explosive growth certainly do.

Give this one a look for an under-the-radar AI play.

James Hires has positions in Alphabet. The Motley Fool has positions in and recommends Alphabet, Microsoft, Nvidia, and Taiwan Semiconductor Manufacturing. The Motley Fool recommends Broadcom. The Motley Fool has a disclosure policy.