Broadcom is forecasting a substantial increase in artificial intelligence chip sales in the coming two years. This optimistic outlook helps to reinforce confidence in the company's ability to compete with Nvidia in the highly profitable AI chip market. The company is also projected to surpass earnings of $30 per share in fiscal 2028, outperforming current Wall Street expectations.
Broadcom anticipates AI chip revenue to reach approximately $115 billion in the fiscal year ending October 2027, an increase from its previous forecast of over $100 billion. This figure is expected to double to roughly $230 billion in fiscal 2028. This growth is driven by major tech companies continuing to invest heavily in AI infrastructure, benefiting suppliers like Broadcom, which provides custom chips and networking components essential for AI systems. Broadcom's custom AI chips are utilized by prominent firms such as Meta Platforms, Google's Alphabet, and OpenAI.
In the third quarter of fiscal 2026, Broadcom's AI chip sales more than tripled, reaching $16.7 billion. This contributed to the company's total revenue of $29.59 billion, surpassing analysts' estimates of $29.36 billion. Adjusted profit for the quarter came in at $3.32 per share, also exceeding estimates of $3.24. Despite these strong results, Broadcom's shares were down over 1% in extended trading, having underperformed rivals and the broader semiconductor index this year due to concerns about AI spending and increased competition.
CEO Hock Tan informed analysts that Broadcom has secured sufficient supply to meet its elevated forecasts for next year, with customer demand continuing to rise. The company has secured committed capacity for additional AI infrastructure deployments through 2028, including over 10 gigawatts for Anthropic, more than 5 gigawatts for OpenAI, and 3 gigawatts for Meta. This demonstrates Broadcom's strong position in supplying critical components for the expanding AI ecosystem, despite a slightly lower-than-anticipated fourth-quarter revenue forecast of $34.8 billion compared to analysts' average estimate of $35.03 billion.
