Broadcom put some very large AI targets on the board. CEO Hock Tan told investors he sees AI chip revenue reaching roughly $115 billion in fiscal 2027 and $230 billion in fiscal 2028, and he expects earnings per share to exceed $30 in fiscal 2028. The update helped the stock bounce back from an earlier drop and, by 6:31 p.m. in New York, end near flat. Through the latest close, shares were up 6.1% this year, a slower climb than the big surges many chip peers posted in 2026.
Near term, Broadcom guided to $34.8 billion in revenue for the fourth quarter that runs through October, shy of the $35.1 billion analyst average with some forecasts topping $36 billion. Within that, AI chips are pegged at $21.7 billion, a hair above the consensus, though a number of estimates were north of $22 billion.
Recent results show the AI flywheel is already spinning. For the fiscal third quarter ended Aug. 2, revenue jumped 86% to $29.6 billion, edging past expectations of about $29.5 billion. Adjusted earnings were $3.32 a share versus a $3.23 estimate. AI semiconductor sales reached $16.7 billion, topping the $15.9 billion average view, a bucket that includes custom-built accelerators used to train and run AI models along with networking chips.
Tan said Broadcom's custom-chip lineup now spans six clients and that four of them will be very large. Among them, Anthropic PBC and OpenAI stand out as they hurry to expand infrastructure. Anthropic is expected to become Broadcom's biggest custom-chip customer in 2027, overtaking Google, and Tan sees OpenAI as the second-largest in that business.
Broadcom has stepped up its collaborations with Google, Anthropic, and OpenAI. Tan said Google is set to receive custom processors worth multi tens of billions of dollars per year over the next several years. Using data center power draw as the yardstick, he outlined shipments to Anthropic of 5 gigawatts next year and another 10 gigawatts the following year.
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For OpenAI, he said Broadcom expects to furnish in 2028 over 5 gigawatts worth of custom chips. By the end of 2027, Meta is slated to receive three successive chip generations from Broadcom.
Demand is currently running hotter than Broadcom can supply, with shortages limiting shipments, Tan said. To ease bottlenecks, the company partnered to establish substrate fabrication at a plant in Singapore, and semiconductor chief Charlie Kawwas said Broadcom is broadening factory investments.
The data center boom is pulling through networking gear alongside custom silicon. According to Bloomberg Intelligence's Kunjan Sobhani and Oscar Hernandez Tejada, the top five hyperscalers' capital budgets have risen roughly 40% to above $700 billion, boosting visibility for demand in both areas.
Tan positioned Broadcom as a credible alternative to Nvidia, saying a new Google co-developed chip is as good as, if not better than, Nvidia's Vera Rubin line for running AI models. Competition is stiffening, though: last month Marvell Technology announced a deal to help produce custom semiconductors for Google. Google and Broadcom have long collaborated on tensor processing units used in AI data centers.
Financing has become part of the playbook. Broadcom set up funding vehicles with Apollo Global Management and Blackstone to help Anthropic purchase the Google chips Broadcom helped develop. The partnership is intended to support more than 20 gigawatts of computing capacity, a scale that would require hundreds of billions of dollars and is roughly equal to 20 nuclear plants.
There is tangible revenue behind the AI buildout: $16.7 billion in AI semis last quarter and an expected $21.7 billion this quarter, plus named delivery plans to Google, Anthropic, OpenAI, and Meta. The other side of the ledger is supply friction and rising competition. If you are watching how AI hype turns into actual cash flow, Broadcom's guidance, customer roadmaps, the Singapore capacity move, and those large financing lines sketch how today's orders could connect to its earnings-per-share target above $30 in fiscal 2028.