Broadcom just took a page from Dell and Nvidia

Broadcom's recent earnings report has left investors puzzled, as it mirrors the impressive growth seen in AI chipmakers Dell and Nvidia over the past fortnight. Despite the rally, Broadcom's shares dropped 3% in premarket trading on Thursday. The company reported a staggering revenue of $29.59 billion, a 86% increase year-over-year, and adjusted earnings per share skyrocketed 96% to $3.32, surpassing Wall Street's expectations.

The surge in performance was driven by an insatiable demand from hyperscalers for custom AI chips and networking equipment, with AI semiconductor revenue tripling to $16.7 billion. Broadcom CEO Hock Tan revealed that the company anticipates delivering $350 billion in AI chips to six key customers by 2027 and another $230 billion in 2028, a total of approximately $350 billion.

JPMorgan analyst Harlan Sur praised Broadcom's conservative AI revenue outlook and upgraded his earnings estimate, maintaining an Overweight rating on the stock. Similar to Dell and Nvidia, Broadcom has shared a strong AI revenue forecast, which has dispelled the notion of a peak in the AI market. Dell and Nvidia have also recently outperformed analysts' expectations, with Dell surpassing revenue guidance by $25 billion and Nvidia projecting a 70% revenue growth for fiscal year 2028.