Broadcom Projects AI Revenue to Hit $230 Billion by Fiscal 2028

Broadcom is betting on a massive acceleration in custom AI silicon, projecting its AI semiconductor revenue to reach approximately $230 billion by fiscal 2028. This forecast signals a strategic pivot toward a future where custom accelerators for hyperscalers serve as the company's primary growth engine.

During a recent earnings call, CEO Hock Tan outlined a trajectory that sees AI revenue climb to $115 billion in fiscal 2027 before doubling again the following year. This outlook follows a record fiscal third quarter of 2026, where total revenue rose 86% year-over-year to $29.6 billion. In that same quarter, AI semiconductor revenue specifically hit $16.7 billion, a 221% increase over the previous year. Broadcom expects fiscal 2026 AI revenue to total $58 billion—a 186% jump from the prior year—and has provided guidance of $21.7 billion for the fiscal fourth quarter alone.

The Custom Silicon Strategy

Unlike the general-purpose GPU market dominated by NVIDIA, Broadcom focuses on AI networking and custom accelerators, known as XPUs. The company designs these custom chips in partnership with Alphabet (Google) and sees significant demand from other industry giants, including Meta, OpenAI, and Anthropic. The scale of this demand is evident in the deployment plans of its partners; Anthropic is expected to deploy 5 gigawatts of TPU chips in 2027, with plans for an additional 10 gigawatts thereafter.

To sustain this growth and prevent manufacturing bottlenecks, Broadcom is vertically integrating its supply chain. The company has already secured the necessary supply of wafers, high-bandwidth memory, and substrates. Furthermore, Broadcom is constructing its own chip substrate plant in Singapore to ensure it can meet these aggressive production targets.

Market Implications and Risks

If these projections are realized, Broadcom's AI division would dwarf the company's current total revenue. The financial impact is already visible: net income for the fiscal third quarter of 2026 more than tripled to $13.1 billion, and AI chips and networking now account for more than half of total sales. The company is targeting earnings per share (EPS) to exceed $30 by fiscal 2028.

However, this growth comes with a concentrated risk profile. Broadcom's AI expansion is heavily dependent on just six custom accelerator customers. This concentration means the company's success is tightly coupled to the capital expenditure of a small group of tech giants. This vulnerability was reflected in the market's immediate reaction, as the stock experienced a slight dip following the announcement due to investor concerns over competition and customer concentration.

What to Watch

Investors will be monitoring whether Broadcom can maintain supply chain stability as it scales toward the $230 billion target. While Hock Tan noted that demand exceeds the current outlook, he cautioned that actual chip deployment depends on external factors, stating that "land and power dictate when a customer's data center capacity turns on."