Broadcom raises AI chip forecast as Big Tech spending accelerates

Broadcom has raised its forecast for AI chip revenue over the next two years, highlighting the growing opportunity in custom silicon and networking components used to power artificial intelligence systems. The company’s outlook reflects continued investment by major technology companies in AI infrastructure.

Broadcom expects AI chip revenue to reach approximately $115 billion in fiscal 2027, up from its earlier estimate of more than $100 billion. It also projects that revenue could double to $230 billion by fiscal 2028, underscoring its confidence in the long-term expansion of the AI chip market.

The company reported $16.7 billion in AI chip sales during the third quarter, contributing to total revenue of $29.59 billion, which exceeded analysts’ expectations. However, Broadcom’s forecast for fourth-quarter revenue of approximately $34.8 billion came in slightly below the $35.03 billion expected by analysts.

Broadcom is benefiting from demand for custom chips designed for major technology companies seeking alternatives to Nvidia’s dominant AI hardware. At the same time, competition is intensifying, with rivals such as Marvell Technology expanding their presence in the custom chip market.

CEO Hock Tan said the company has secured sufficient supply to meet rising demand. Broadcom also has substantial infrastructure commitments from customers including Anthropic, OpenAI and Meta, supporting its confidence in future growth.

The results underline the strength of AI infrastructure spending while also showing how closely investors are watching expectations in the semiconductor sector. Broadcom’s shares have gained about 6% this year, but the company has underperformed some rivals as investors weigh competition and the sustainability of AI investment.