New York, Feb 6, 2026, 16:34 EST — After-hours
- Broadcom shares jumped roughly 7% in after-hours action, lifted along with a wider rally in chip names.
- Alphabet put its projected 2026 capex at $175 billion to $185 billion. Amazon, for its part, is planning to spend $200 billion.
- Investors are sizing up AI hardware demand, but doubts linger over whether the recent surge in spending will actually deliver returns.
Shares of Broadcom (AVGO.O) jumped roughly 7% to $332.92 in after-hours action on Friday, fueled by renewed optimism that heavy spending on artificial intelligence by major tech players is still picking up steam. “There’s enough evidence that there’s real demand for AI products,” said Ross Mayfield, an investment strategy analyst at Baird. 1
This week’s sharp swings in AI stocks are getting fresh fuel, as capital flows snap back to data center “picks-and-shovels” plays and away from software. Alphabet has laid out a new range for 2026 capex—$175 billion to $185 billion—aiming at a big AI infrastructure push. CEO Sundar Pichai told analysts the company’s AI spending and infrastructure moves are “driving revenue and growth across the board.” 2
But those same spending ambitions also spooked investors. Amazon dropped after revealing it plans to shell out $200 billion in capital expenditures for 2026. MoffettNathanson called the scale “materially greater than consensus expected,” underscoring just how quickly the AI price tag is climbing. 3
Broadcom’s shares swung from $313.26 to $334.90 on Friday, starting the session at $319.94. Volume approached 33 million shares. That move put Broadcom ahead of a swath of big tech stocks as the Dow broke above 50,000 and chipmakers like Nvidia and AMD joined the rally.
Alphabet bumped its capex target from $91.45 billion for 2025, saying most of that spend is headed for AI computing firepower—think servers, data centers, networking gear. That’s Broadcom’s turf. The chipmaker supplies networking silicon for data centers, plus custom chips tailored for its biggest clients, all feeding into this supply chain.
Investors are caught between two clashing narratives: robust appetite for AI hardware, and fresh worries over runaway spending needed to fuel it. “It’s not that the trade is over, but it got too pricey,” said Andrew Wells, chief investment officer at SanJac Alpha. 4
Broadcom’s decision landed as investors reconsidered which players benefit most when the top cloud firms ramp up spending. The so-called “hyperscalers” — those giant cloud operators — are leaning into a costlier, asset-heavy strategy, a trend that’s been a boon for vendors supplying chips, networking hardware, and server parts.
Broadcom landed in European headlines after Renault announced plans to challenge a German court decision tied to a patent dispute over ethernet network cables. “We vigorously contest it and we will file an appeal without delay,” Renault said in its statement. 5
Broadcom stands out as a bellwether for AI-related semiconductor stocks, thanks to its presence in both chips and infrastructure software following the VMware acquisition. That combination tends to soften the blow from volatility in individual markets, yet it also leaves shares exposed to changing spending outlooks among major cloud clients.
Still, the risks haven’t disappeared. A burst in capex that doesn’t deliver stronger revenue, or worries that payoffs will disappoint, could hit both the companies doing the spending and their suppliers—particularly after such strong rallies. Some analysts point out: as capital intensity climbs, the “margin for error” keeps shrinking.
On Monday, chip names face another test to see if they can extend Friday’s bounce, with the market sifting through new signals on AI spending and earnings. Broadcom has its own catalyst on deck: the company will release fiscal Q1 results on March 4 after the closing bell, with a conference call set for 5:00 p.m. ET. 6
