PALO ALTO, Calif., March 5, 2026, 1:25 PM PST.
Broadcom Inc. raised its outlook for AI chip sales on Thursday, projecting the segment to surpass $100 billion in 2027. That bullish forecast pushed shares up roughly 4.8%, ending at $332.65. The chip and software maker also put second-quarter revenue guidance at approximately $22 billion, beating the analyst consensus of $20.56 billion.
That question has been hanging over the market: Can the industry really sustain all this AI data center spending? Broadcom’s latest update suggests it can. The company says Alphabet, Microsoft, Amazon, and Meta are on track to pump over $600 billion into AI infrastructure this year. That huge budget is fueling continued demand for network hardware and custom processors, with Nvidia still holding the lead.
Broadcom’s first-quarter revenue climbed 29% to $19.31 billion, while adjusted earnings per share landed at $2.05. AI revenue more than doubled, surging 106% to $8.4 billion. “Our AI revenue growth is accelerating,” Chief Executive Hock Tan said. PR Newswire
Broadcom is projecting $10.7 billion in AI chip revenue for this quarter. CEO Hock Tan told analysts on the post-earnings call that he now sees a “line of sight” to over $100 billion in AI semiconductor sales for 2027. PR Newswire
Tan told analysts Broadcom is planning to deliver 1 gigawatt of custom chips to Anthropic in 2026, with that figure jumping to 3 gigawatts by 2027. The company also expects to ship OpenAI’s first AI chip in 2027. As for Meta, Tan said the MTIA roadmap remains “alive and well,” dismissing concerns that customers moving more chip design in-house may put pressure on Broadcom’s business. Reuters
These chips operate in the ASIC market—that’s application-specific integrated circuits, processors designed for more specialized jobs than the usual general-purpose chips. For big clients, they offer a way around Nvidia’s pricier AI processors. And judging by the volumes Broadcom reported, the company is now approaching the kind of scale seen in the latest AI chip contracts from Nvidia and Advanced Micro Devices.
Gil Luria at D.A. Davidson called Broadcom’s April-quarter outlook and its 2027 projection “very encouraging,” noting they signal demand visibility extending further than the typical one-quarter timeframe investors are used to. But not everything landed: revenue from infrastructure software increased roughly 1% to $6.8 billion for the first quarter, undershooting analyst forecasts of 2.6% growth and $6.88 billion. Reuters
The outlook isn’t straightforward. There’s still a split among investors on whether massive AI capex will actually translate into returns that justify the outlay. Broadcom is also tied to foundry capacity, plus high-bandwidth memory—the kind fueling AI servers. Tan said those supply lines are locked in through 2028. Still, if just a few big customers cut back, Broadcom’s 2027 target could be in jeopardy.
Broadcom signed off on a fresh $10 billion stock buyback program running through Dec. 31, 2026, while holding its quarterly payout steady at 65 cents per share. The figures point to continued AI expansion, reaching past Nvidia’s turf and further into specialized chips.
