Broadcom's CEO has locked in a two-step AI revenue ramp, with secured supply commitments supporting about $115 billion in 2027 and a repeat doubling to $230 billion the following fiscal year, extending contracts with Google, Meta, OpenAI and Anthropic.
Broadcom's Hock Tan has put a second doubling on the table, and the sector is reading it as the clearest demand signal yet. The CEO now guides AI semiconductor revenue to about $115 billion by 2027 and $230 billion by fiscal 2028, a trajectory he first flagged on the company's June 3 earnings call and has not walked back since.
"We reiterate our AI semiconductor revenue guidance to be in excess of $100 billion" for fiscal 2027, Tan told analysts, adding that secured supply supports roughly $115 billion that year and a further doubling to $230 billion in fiscal 2028.
The numbers behind the promise are already moving. AI semiconductor revenue reached $10.8 billion in the fiscal second quarter ended May 3, up 143 percent from a year earlier, with guidance calling for $16.0 billion in the third quarter. Bookings ran at nearly three times shipments during the quarter — over $30 billion against the $10.8 billion shipped — and Tan said visibility now extends to 2028. For the current fiscal year, Broadcom expects about $56 billion of AI semiconductor revenue, up roughly 180 percent from fiscal 2025.
The forecast is anchored in named customers rather than hope. A long-term agreement with Alphabet covers multiple generations of its TPU chips, an arrangement gives Anthropic access to another 5 gigawatts of TPU-based compute starting in 2027, and a contractual commitment deploys 1.3 gigawatts for OpenAI next year. A partnership with Meta Platforms adds 3 gigawatts of custom chips through the end of 2028, and two additional customers had placed $6 billion of purchase orders as of the June call.
The stock has traveled in the opposite direction of the forecast. Broadcom trades near $370, about 25 percent below its 52-week high of $495. At that peak the shares changed hands at roughly 25 times the adjusted earnings analysts expect for fiscal 2027, the year the $100 billion forecast covers; today they trade at about 19 times those same expected earnings. The same forecast is selling for about a quarter less than it commanded at the top.
The drawdown has three plausible explanations, and they are not mutually exclusive. Timing is the most concrete: Tan plans to ship about 10 gigawatts of AI compute in fiscal 2027, weighted toward the back half of the year, so a back-loaded ramp means the revenue that justifies today's price arrives late and any slip pushes it into fiscal 2028. Concentration is the familiar risk, and it has fresh evidence — on Aug. 19 Broadcom shares fell about 5 percent after Marvell Technology disclosed an expanded custom-chip agreement with Google, whose TPU chips Broadcom has long designed. Six core customers carry the AI number, so a shift at even one matters.
Still, nothing indicates Google is leaving. Broadcom announced its own long-term agreement in April covering multiple generations of TPUs, and these customers sign multiyear contracts rather than one-off orders. Doubting the forecast itself means doubting signed agreements Tan has described in detail, plus bookings running at nearly three times shipments.
That makes Wednesday's fiscal third-quarter report more consequential than a typical quarter. The results will show how the $16 billion AI quarter came in, and the fiscal fourth-quarter guidance will show the state of the $56 billion full-year number that the fiscal 2027 ramp builds on. Those two figures are the first hard checkpoints between June's promises and next year's $100 billion-plus target.
For investors, the question is whether the market is discounting delivery risk or something worse. Broadcom's guidance, if it holds, would make the company the clearest beneficiary of sustained hyperscaler capital spending on custom accelerators and networking silicon — a buildout that also lifts peers including Nvidia, AMD and Marvell. At 19 times earnings that still have to be delivered, the valuation is a discount only if the ramp arrives on schedule; a back-loaded year can test patience for quarters at a time. The Sept. 2 report, and the fourth-quarter guide that follows, will decide which story the market has been pricing.
This article is for informational purposes only and does not constitute investment advice.
