Hock Tan Guided Broadcom Past $100 Billion of AI Revenue in 2027. The Stock Is 25% off Its High.
The CEO's forecast hasn't budged since June. The price the market puts on next year's earnings has dropped by about a quarter.
Broadcom CEO Hock Tan has forecasted the company to generate over $100 billion in AI semiconductor revenue by fiscal 2027, which is 180% higher than its 2025 revenue. The company's AI semiconductor revenue reached $10.8 billion in the fiscal second quarter of 2026, a 143% increase from the previous year. Broadcom has secured long-term agreements with Alphabet, Anthropic, OpenAI, and Meta Platforms for AI compute resources, totaling 16 gigawatts.
The company has received purchase orders worth $6 billion from two additional customers. Despite the strong forecast, Broadcom's stock price has dropped by 25% from its 52-week high of $495, trading near $370. The market is discounting the timing of the expected revenue, as the majority of it is back-loaded to the back half of fiscal 2027, which could lead to weaker results in the near term.
The September 2 fiscal third-quarter report will reveal how well the company meets its $16 billion AI quarter and $56 billion full-year forecast. Despite the drawdown, the forecast remains credible, and the stock is currently trading at a discount. Investors should monitor the September report for confirmation of the forecast and assess the risks associated with the back-loaded ramp.
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