Broadcom Sees $230B In AI Revenue By 2028, Driven By 'Geniuses' Openai, Anthropic: Analyst Says Some Risks Remain Unresolved

• Broadcom expects AI semiconductor revenue to reach $115 billion in fiscal 2027 and $230 billion in fiscal 2028.
• Anthropic is expected to become Broadcom's largest XPU customer in 2027, while OpenAI could deploy more than 5 gigawatts of Broadcom's next-generation Jalapeno XPU in 2028.
• Broadcom's Q3 AI chip revenue more than tripled, but a weaker-than-expected Q4 revenue forecast pressured AVGO shares.

Broadcom Inc.'s AI chip business is showing little sign of slowing down, with the semiconductor giant expecting revenue from its AI chips to double in each of the next two years as demand from customers including Anthropic and OpenAI accelerates.

The Palo Alto, California-based company expects AI semiconductor revenue to reach about $115 billion in fiscal 2027, up from roughly $58 billion expected in 2026, CEO Hock Tan said on the company's third-quarter earnings call. The company sees another doubling to $230 billion in fiscal 2028, underscoring the strength of its custom AI accelerator and networking chip business.

“In 2027, we have secured the supply to again double AI revenue to approximately $115 billion. Our demand actually exceeds this outlook, and we will work to improve supply,” Tan said.“In 2028... we have line of sight for fiscal 2028 AI semiconductor revenue growth to again double to $230 billion. Here again, we have secured the supply to meet this outlook.”

Despite the strong outlook, Broadcom's fourth-quarter revenue forecast, which implies 93% growth, came in below Wall Street's expectations, sending AVGO shares 1.3% lower in overnight trading late Wednesday.

Broadcom Remains AI Chip Powerhouse On OpenAI, Anthropic Deals

The comments highlight how Broadcom has emerged as one of the biggest beneficiaries of the AI infrastructure boom beyond Nvidia. Its custom accelerators, or XPUs, are increasingly being adopted by major AI companies looking to build their own chips.

AI chip sales more than tripled to $16.7 billion in the third quarter, lifting Broadcom's total revenue 86% to $29.59 billion, beating estimates of $29.36 billion. Adjusted profit came in at $3.32 ​per share, compared with estimates of $3.24.

Anthropic is expected to become Broadcom's largest XPU customer next year, with the AI startup planning to deploy another 5 gigawatts of Broadcom-designed TPU v8i chips in 2027 and an additional 10 gigawatts in 2028. OpenAI is also expected to become a major customer, with Broadcom seeing a path for the ChatGPT maker to deploy more than 5 gigawatts of its next-generation Jalapeno XPU in 2028.

“These two guys, Anthropic and OpenAI, I mean, these are... it's like you have two geniuses in the middle of outer Mongolia. They need to go to college to fulfill their potential,” Tan said, suggesting that while both companies have enormous potential, they need access to Broadcom's chips and infrastructure (“college”) to fully realize it.

“We do what we can to help them, and part of it is creating sources of financing to help these companies with the leading-edge frontier models in the world be able to play in the same playing field and be able to offer these great technology products to the world,” he added.

Broadcom has secured supplies for wafers, substrates and memory needed to meet its 2027 and 2028 AI revenue targets. The company also plans to begin deploying its Singapore substrate facility in fiscal 2027 to ease a key supply bottleneck.

AVGO Stock: Analysts, Retail Cautiously Upbeat

Moor Insights & Strategy CEO and analyst Patrick Moorhead said Broadcom delivered a“strong, but not flawless” third quarter, arguing that the key takeaway was its AI execution rather than the modest revenue beat. He pointed to Broadcom's $16.7 billion in Q3 AI revenue and $21.7 billion Q4 outlook as evidence that the company is successfully converting its AI backlog into sales. 

Moorhead also highlighted Broadcom's broader AI infrastructure advantage, spanning custom XPU co-design, Ethernet switching, SerDes, optics, packaging and foundry access, but cautioned that the results“do not prove broad NVIDIA displacement.”

“The wrinkle is software, and the release does not resolve customer concentration, Google multisourcing, bookings conversion, AI networking mix, first-generation XPU yields or the fiscal 2027 AI bridge,” he said.

Future Fund Managing Director Gary Black noted the improvement in AVGO stock after-hours “as investors responded favorably to the company's AI rev growth guidance”. 

“As the AI Rev strength becomes clearer to investors, I expect the stock to recover somewhat,” he said.

AVGO was the top trending ticker on Stocktwits at the time of writing, with the retail sentiment for the stock turning 'extremely bullish' from 'bullish' the previous day.

“$AVGO Broadcom just posted the most massive financial results in company history - bears can say whatever they want - the share price will go higher regardless,” a trader said.

Another wrote:“$AVGO it takes time for the earnings results and outlook to filter into the market; this forward outlook is insane... The stock is too cheap, just like Nvidia.  It's going higher.”

AVGO stock declined in the two sessions leading up to the Q3 report and is up a mere 6.5% year to date. In comparison, the iShares Semiconductor ETF (SOXX) has gained over 65% over the same period.

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