Broadcom has significantly raised its AI chip revenue forecast for the fiscal year ending in October 2027, signaling strong and expanding demand from leading tech companies like Meta, Google, and OpenAI. This update underscores the broadening AI infrastructure market beyond incumbent chipmaker Nvidia.
- Broadcom forecasts AI chip revenue growth to $230 billion by fiscal 2028
- Strong customer commitments from Meta, OpenAI, and Anthropic support outlook
- AI chip bookings exceeded $30 billion in recent quarter
What happened
Broadcom updated its forecast, increasing expected AI chip revenue to approximately $115 billion for the fiscal year ending October 2027, up from a previous estimate of over $100 billion. The company further expects this figure to nearly double to $230 billion in fiscal 2028. These projections highlight the rapid expansion of Broadcom’s AI business amid sustained capital expenditures by leading tech firms.
In the third quarter, Broadcom saw AI chip sales more than triple to $16.7 billion, contributing to total revenues of $29.59 billion—surpassing analysts' estimates. Despite this strong AI segment performance, shares experienced a slight decline in extended trading, reflecting investor caution amid competitive pressures and broader semiconductor market concerns.
Why it matters
Broadcom’s raised forecast indicates that AI investment by major technology companies like Meta, Alphabet’s Google, and OpenAI remains robust, driving substantial demand for customizable AI chips and related networking components. Unlike Nvidia’s premium processors, Broadcom benefits from a diversified product mix essential for AI infrastructure deployment.
The company’s visibility into committed AI infrastructure capacity totaling more than 18 gigawatts from customers like Anthropic, OpenAI, and Meta signals concrete, near-term demand rather than speculative growth projections. This positions Broadcom as a key supplier in the evolving AI hardware ecosystem that supports large-scale AI models and services.
What to watch next
Market watchers will be paying close attention to Broadcom’s ability to meet these high growth expectations, especially amid rising competition from companies like Marvell, which recently struck a custom chip partnership with Google. Monitoring quarterly sales and new customer commitments will be vital to assess sustained momentum.
Additionally, how Broadcom manages supply chain constraints and scales production to meet the burgeoning demand will influence its performance in the highly dynamic AI semiconductor sector. The evolving AI chip market landscape—including technology advancements and pricing pressures—will also bear on Broadcom’s competitive positioning in India and globally.