Key Takeaways:
Broadcom is already converting AI demand into revenue through custom chips and the networking gear that connects them, a combination that puts it on track to join Microsoft in the $3 trillion club.
Broadcom's AI semiconductor revenue is on track to exceed $100 billion in fiscal 2027, up from $10.8 billion in the June quarter, putting the chip designer on a path to a $3 trillion market cap.
"Broadcom's revenue from Anthropic alone should double to $42 billion in 2027 from $21 billion this year," Vijay Rakesh, analyst at Mizuho, said.
The company reported $22.2 billion in fiscal Q2 revenue, up 48 percent year over year, with AI chips accounting for nearly half of the total. Management expects fiscal Q3 revenue of $29.4 billion, an 84 percent jump, driven by AI revenue of $16 billion — more than triple the prior-year level. New AI semiconductor orders added during the quarter exceeded $30 billion, providing visibility into coming quarters.
Broadcom trades at 21 times forward earnings, a discount to the Nasdaq-100's 26 times multiple. If the stock matches that index multiple by the end of fiscal 2028, with earnings per share of $26.38, shares could reach $686 — a 77 percent gain from current levels that would push market cap past $3 trillion.
Broadcom controls roughly 70 percent of the custom AI chip market, designing application-specific processors for six hyperscale customers including Google, Meta Platforms, OpenAI, and Anthropic. The company is also a leading supplier of optical networking components, the high-speed interconnects that link AI accelerators inside data centers. The data center optical interconnect market is expected to grow tenfold between 2024 and 2030 to $144 billion, according to China Insights Consultancy, while the custom AI chip market is projected to reach $308 billion by 2035, a 24 percent compound annual growth rate, per Globe Market Research.
The long-term agreements with those six core customers extend into fiscal 2028. Broadcom is on track to deploy 1 gigawatt of AI computing capacity for Anthropic this year in partnership with Google, rising to more than 3 gigawatts in 2027. In July, the company extended a partnership with Apple to supply multiple generations of custom high-performance chips through 2031.
Consensus estimates put Broadcom's fiscal 2026 earnings at $11.63 per share, up 70 percent, with fiscal 2028 EPS forecast at $26.38. Morgan Stanley reaffirmed an overweight rating in July with a $502 price target, ranking Broadcom as a core AI beneficiary second only to Nvidia. The average Wall Street target sits at $527.88, roughly 27 percent above the current price of $416.
The comparison with Marvell Technology, the closest rival in custom silicon, highlights the scale gap. Marvell posted $2.418 billion in quarterly revenue and targets $11.5 billion by 2027 — a fraction of Broadcom's AI business alone. Broadcom's integrated approach, pairing chip design with networking, gives it a customer lock-in that Marvell, offering a second source for cloud giants, has yet to match.
The risk is execution. Broadcom shares fell more than 11 percent after earnings in December 2025 and June 2026, even as results beat expectations, because guidance fell short of the most optimistic projections. The market expects fiscal Q3 EPS of $3.21, up about 90 percent year over year, when the company reports September 2. If management confirms the $100 billion AI revenue path for fiscal 2027, the stock has room to challenge its 52-week high of $495 before the year is out.
This article is for informational purposes only and does not constitute investment advice.
