Emerald Wealth Partners noted in its Q2 2026 investor letter that Broadcom dominates custom AI chip design, having long co-designed Tensor Processing Units (TPUs) with Google. As AI spending shifts from model training to inference, custom chips offer superior performance and cost-effectiveness compared to NVIDIA's general-purpose GPUs. Furthermore, Broadcom also dominates the Ethernet switching chips required for AI cluster interconnects and provides the virtualization layer needed for enterprises to run AI workloads through VMware. The firm increased its stake in Broadcom after OpenAI announced its selection of Broadcom to design its custom inference chips. This news helped Broadcom's stock price rise by 22.3% during the quarter, contributing 64 basis points to the strategy.