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Just For You
Here's Why the AI Infrastructure Story Is Just Getting Bigger for GOOGLReported by Ryan Hasson. Date Posted: 4/21/2026. 
Key Points
- Alphabet is in talks with Marvell Technology to co-develop two new AI chips, expanding its multi-vendor chip supply chain strategy.
- GOOGL committed $175-$185 billion in 2026 capital expenditures, backed by a $240 billion Google Cloud contract backlog.
- Alphabet's most recent quarter beat revenue and EPS estimates, with analysts holding a Moderate Buy rating and a $368.94 price target.
- Special Report: Have $500? Invest in Elon’s AI Masterplan
Alphabet (NASDAQ: GOOGL) closed Monday's session at $337.42, roughly 3% below its 52-week and all-time high of $349. For a roughly $4 trillion company operating in a volatile macro environment, that kind of resilience speaks volumes. The stock is up about 8% year to date, outpacing many of its mega-cap peers, and the fundamental story behind that performance keeps getting more compelling. Recent news flow has given investors even more reasons to pay attention. Alphabet Is Building the AI Chip Supply Chain of the FutureReports on April 20 said GOOGL is in talks with Marvell Technology (NASDAQ: MRVL) to co-develop two new AI chips. One would be a memory processing unit designed to work alongside Google's Tensor Processing Units (TPUs). The other would be a TPU built specifically for inference — the phase of AI computing when trained models serve responses to users and which is rapidly becoming the dominant compute cost for AI companies at scale.
The market reacted quickly. Marvell jumped nearly 6% on the news, while Broadcom (NASDAQ: AVGO), Google's primary TPU design partner, fell almost 2% amid concerns about potential displacement. A more nuanced read is that Google is not replacing Broadcom so much as diversifying its supplier base. Google already works with Broadcom on high-performance variants and with MediaTek on cost-optimized designs. Adding Marvell as a third design partner, focused on memory and inference, reflects a deliberate strategy to build a more resilient, multi-vendor AI chip supply chain. In a market where AI compute demand is outstripping supply, that diversification is a competitive advantage rather than a sign of instability. The announcement came just days before Google Cloud Next, the company's annual enterprise AI conference in Las Vegas (April 22–24), where a new TPU architecture is expected to debut. The timing underscores how quickly Alphabet is moving across multiple fronts. The Ironwood Foundation and a $175 Billion CommitmentThe Marvell talks build on significant technical progress. Google's seventh-generation TPU, Ironwood, delivers 42.5 exaflops across a 9,216‑chip superpod, offering roughly fourfold better performance per chip and 192 gigabytes of high-bandwidth memory (HBM) per chip versus its predecessor. Google calls it the first TPU designed for the age of inference, and it is already in commercial use. Anthropic and Meta (NASDAQ: META) have committed to acquiring substantial quantities of TPUs through multibillion-dollar deals. Backing this technology push is Alphabet's 2026 capital expenditure plan of $175 billion to $185 billion, nearly double the $91.4 billion spent in 2025. The allocation is roughly 60% for servers and 40% for data centers. This level of investment is demand-backed: Google Cloud has a backlog of signed but undelivered contracts totaling about $240 billion. Google Cloud revenue grew 48% year over year to $17.7 billion in Q4 2025, and analysts expect growth to exceed 50% in the year ahead. The Fundamentals Back Up the StockAlphabet's most recent quarterly results, reported Feb. 4, were a clean beat. Revenue of $113.83 billion topped the $111.24 billion consensus, and EPS of $2.82 beat estimates of $2.57. Net income for the quarter was $34.5 billion, and full-year 2025 net income reached $132.17 billion. Annual revenue surpassed $400 billion for the first time. Q1 2026 earnings are due April 29, arriving just days after Google Cloud Next, and the setup heading into that print is constructive. Analysts maintain a consensus Moderate Buy rating, with a price target of $368.94 — roughly 9% above current levels. With GOOGL trading within 3% of its 52-week high, the stock isn't inexpensive on an absolute basis. But for investors focused on a dominant cloud business growing above 50%, a proprietary AI chip stack being developed across multiple design partners, $175+ billion in infrastructure spending backed by contracted demand, and a forward earnings multiple that remains reasonable, the case for continued leadership is compelling. |
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