Broadcom raises AI chip forecast as Big Tech keeps writing bigger checks
They have gained about 6% this year, significantly underperforming rivals and the broader semiconductor index, as AI spending concerns and increased competition persist, including Marvell's recent custom chip deal with Google.
Broadcom has revised its AI chip sales forecast upwards, projecting revenue of approximately $115 billion for the fiscal year ending in October 2027. This represents a significant increase from the previous estimate of over $100 billion. The company anticipates that AI chip revenue will double to around $230 billion in fiscal 2028.
This optimistic outlook is driven by the continued strong demand from major technology companies, despite concerns over returns on their massive investments in AI infrastructure. Broadcom's shares experienced a slight decline following the announcement, but later recovered some of the loss. The company secured $30 billion in bookings for its AI chips in the most recent quarter alone, with major customers including Meta Platforms, Alphabet's Google, and OpenAI committing to substantial deployments.
Analysts note that AI spending is diversifying beyond Nvidia's high-cost processors, benefiting suppliers like Broadcom that provide both custom chips and the networking components essential for AI systems.
Written by urgent.news from Economic Times Tech's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
