Shares of Broadcom surged 6% in after-hours trading Wednesday following Alphabet’s earnings report and announcement of a major increase in capital expenditures for 2026. Nvidia also saw its stock rise about 2%, reflecting investor optimism around AI-driven growth.

Alphabet disclosed that it expects to spend between $175 billion and $185 billion on capital expenditures this year—nearly double its 2025 spending—aimed at expanding AI-focused data centers and compute capacity for Google DeepMind and cloud services. Analysts said the record-level investment benefits semiconductor companies like Broadcom, which supplies Google’s custom tensor processing units (TPUs), and Nvidia, whose GPUs support other AI workloads.

Ben Reitzes, head of technology research at Melius Research, called the capex projection “an incredible number” for Alphabet’s ecosystem. “This is a major boon for companies tied to Google’s AI infrastructure,” he said. Broadcom develops custom chips, or ASICs, including TPUs used in Google’s Gemini AI models. The company recently sold TPU Ironwood rack systems to AI lab Anthropic, highlighting the growing demand for specialized hardware from hyperscale AI users.

While Google relies on its own TPUs for advanced AI models, it also continues to use Nvidia chips for other workloads. Broadcom’s custom chip unit, referred to as “XPUs,” is being developed for five major hyperscale customers, although most details remain undisclosed. Other tech giants, including Microsoft, Amazon, and Meta, are also investing in proprietary chips, underscoring the competitive push to scale AI infrastructure.

Investors are increasingly viewing the AI capex surge as a long-term tailwind for semiconductor suppliers that partner with hyperscalers. Broadcom’s expertise in chip design and intellectual property integration positions it as a key player in enabling next-generation AI computing, while Nvidia benefits from both direct sales and integration alongside Google’s proprietary hardware.

Overall, Alphabet’s unprecedented investment in AI infrastructure is reshaping the semiconductor market, creating growth opportunities for companies supplying specialized chips and cloud compute systems critical to the next wave of artificial intelligence applications.