Broadcom CEO Predicts AI Chip Revenue Will Surpass $100 Billion by 2027

Broadcom Targets $100 Billion in AI Chip Sales for 2027

Hock Tan, CEO of Broadcom Inc., announced that the company anticipates its AI chip sales will surpass $100 billion next year, signaling a significant push into a market long dominated by Nvidia.

During a call with analysts, Tan stated that Broadcom is on track to reach this milestone by 2027 and has already secured the necessary supply chain to support this growth.

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Broadcom estimates its AI chip revenue will reach $10.7 billion this quarter, a substantial increase from the $20 billion reported for all of 2025. Following Tan’s comments, Broadcom shares rose roughly 4% in after-hours trading.

Broadcom’s AI Strategy and Market Position

Tan has increasingly aligned Broadcom’s future with artificial intelligence. While Nvidia remains the leader in AI accelerators—chips essential for training and running AI models—Broadcom is positioning itself as a strong competitor with its custom-designed semiconductors, targeting both accelerator and networking chips for AI applications.

On Wednesday, Broadcom also revealed a quarterly outlook that exceeded analyst expectations and announced a new stock buyback program valued at up to $10 billion.

The company expects second-quarter revenue to be around $22 billion, ending May 3. Analysts had forecast an average of $20.5 billion, though some estimates reached $22 billion.

Recent Performance and Investor Sentiment

Earlier this year, doubts about Broadcom’s AI prospects led to an 8.3% drop in its stock price. Concerns about a potential bubble in AI spending have grown among investors, and even Nvidia’s impressive earnings last month triggered a selloff. The longevity of the current AI boom remains a key question.

Broadcom’s valuation has soared in recent years, fueled by deals to supply custom AI chips to companies such as OpenAI and Anthropic.

Expanding Partnerships and Product Launches

Broadcom’s outlook has also improved thanks to rising interest in Google’s tensor processing unit (TPU), a chip co-developed with Broadcom. The company recently shipped the first batch of a new processor generation, which is expected to be adopted by several new clients this year.

Financial Highlights

For the fiscal first quarter ending February 1, Broadcom reported sales of $19.3 billion and earnings of $2.05 per share, excluding certain items. Analysts had predicted revenue of $19.3 billion and earnings of $2.03 per share.

AI Revenue Growth and Future Plans

Broadcom’s AI revenue more than doubled to $8.4 billion during the period, outpacing expectations. Tan attributed this surge to strong demand for custom AI accelerators and networking chips.

Despite Broadcom’s ambitious targets, Nvidia is projected to generate $333 billion in AI data center revenue in fiscal 2027, far outpacing Broadcom.

Tan expects OpenAI to begin large-scale shipments of Broadcom chips next year, reaching over 1 gigawatt of computing power. Demand for Google’s TPU is also expected to accelerate in 2027, with Broadcom planning to supply chips to Anthropic to enable 1 gigawatt of capacity this year and more than 3 gigawatts next year.

Tan addressed speculation about Meta Platforms potentially moving away from Broadcom’s custom accelerators, stating that the partnership remains strong. Products are currently shipping, and next-generation chips will scale to multiple gigawatts in 2027 and beyond.

Meta’s CFO Susan Li also shared the company’s ambitions to develop chips capable of training its AI models.

Ongoing Innovations and Buyback Program

Beyond custom AI chips, Broadcom continues to upgrade its networking equipment to better support AI workloads. Tan has also expanded Broadcom’s software business through acquisitions.

The new stock buyback plan, following $7.8 billion in repurchases during the first quarter, will continue through the end of the year.

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