Strong demand for custom artificial intelligence chips is set to drive massive growth for Broadcom, with the company forecasting AI chip revenue to exceed $100 billion in 2027. The announcement pushed its shares up nearly 5% in extended trading. Broadcom also unveiled a new share repurchase program of up to $10 billion through year-end.
Big Tech companies including Alphabet, Microsoft, Amazon and Meta are expected to spend at least $630 billion this year on AI infrastructure. This spending is boosting demand for chips, servers, storage and networking equipment.
“Our visibility in 2027 has dramatically improved. Today, in fact, we have line of sight to achieve AI revenue from chips in excess of $100 billion in 2027,” CEO Hock Tan said during a post-earnings call.
Broadcom expects second-quarter revenue of about $22.0 billion, above analysts’ estimate of $20.56 billion. It projected AI chip revenue of $10.7 billion for the quarter.
The company works with clients such as Google to develop tensor processing units and with OpenAI on custom processors. Its engineers convert early designs into physical chip layouts manufactured by TSMC.
Tan said Broadcom plans to deliver 1 gigawatt of TPUs to Anthropic in 2026, increasing to 3 gigawatts in 2027. It also aims to ship OpenAI’s first AI chip in 2027 and deliver over 1 gigawatt of those chips.
The disclosed volumes show Broadcom signing deals close in size to competitors such as Nvidia, which reported 5 gigawatts of sales to OpenAI, and Advanced Micro Devices, which signed deals of up to 6 gigawatts with OpenAI and Meta.
Addressing speculation about Meta’s AI chip slowdown, Tan said, “Meta’s custom accelerator MTIA roadmap is alive and well. We’re shipping now.”
Broadcom previously said it expects to sell at least 1 million chips by 2027 using its stacked design technology.
In Q1, revenue rose 29% to $19.31 billion, above estimates of $19.18 billion. Adjusted EPS was $2.05 versus $2.03 expected. AI revenue more than doubled to $8.4 billion. However, infrastructure software growth slowed to 1% at $6.80 billion, below the expected 2.6% growth to $6.88 billion.
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