Broadcom has raised its forecast for artificial intelligence chip revenue, offering fresh evidence that demand for AI infrastructure remains strong despite growing scrutiny over the enormous amounts technology companies are spending on data centers.
The semiconductor and infrastructure software company now expects AI chip revenue of about $115 billion in fiscal 2027, up from its previous forecast of more than $100 billion. Broadcom expects that figure to potentially double to approximately $230 billion in fiscal 2028.
AI chip sales more than triple
Broadcom’s latest forecast follows a sharp increase in AI-related sales. Its AI semiconductor revenue reached $16.7 billion in the fiscal third quarter, more than three times the level from a year earlier.
Overall third-quarter revenue came in at $29.59 billion, slightly above analyst expectations, while adjusted earnings reached $3.32 per share. The company expects AI semiconductor revenue to climb further to approximately $21.7 billion in the fourth quarter.
Broadcom’s AI business extends beyond conventional processors. The company develops custom AI accelerators and networking components that help large technology companies build their own computing infrastructure.
Its customers include Meta, Google and OpenAI, with demand for customized chips becoming an increasingly important part of the AI hardware market.
Custom silicon becomes a bigger AI battleground
The latest outlook also highlights a broader shift in the AI semiconductor industry. While Nvidia remains a dominant supplier of AI processors, hyperscalers and AI companies are increasingly pursuing custom silicon to control costs, performance and the design of their infrastructure.
Broadcom said bookings for its AI chips exceeded $30 billion in the latest quarter. CEO Hock Tan also said the company has secured enough supply to support its higher 2027 forecast and has visibility into additional AI infrastructure deployments extending into 2028.
The company cited planned infrastructure deployments involving Anthropic, OpenAI and Meta as part of that longer-term demand.
Strong outlook, but investors remain cautious
Despite the upbeat AI forecast, Broadcom’s near-term outlook did not fully satisfy investors. The company projected fourth-quarter revenue of approximately $34.8 billion, slightly below the roughly $35 billion analyst consensus.
That cautious reaction reflects a larger question facing the technology sector: whether enormous AI infrastructure investments will ultimately generate returns large enough to justify their scale.
For Broadcom, however, the continued growth of custom AI chips and networking hardware provides another avenue to benefit from the expansion of AI data centers, even as the competitive landscape around AI processors becomes more crowded.
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