Broadcom Forecasts Strong AI Chip Revenue Growth Amid Rising Demand from Hyperscalers
Broadcom Inc. (NASDAQ:AVGO) has raised its revenue forecast for AI chips, projecting $115 billion in fiscal 2027 and doubling it to $230 billion by fiscal 2028. This growth reflects increasing demand from hyperscale cloud providers seeking alternatives or complements to NVIDIA Corporation's GPUs (NASDAQ:NVDA). Hyperscalers are diversifying their AI infrastructure investments, favoring suppliers like Broadcom that offer both custom chips and networking components. Broadcom’s CEO Hock Tan noted strong demand for its products among major clients such as OpenAI, Meta, Google, and Anthropic. Analysts highlight the potential of these relationships to provide long-term visibility beyond existing partnerships with Google. However, competition is intensifying in this space, including Alphabet's recent expansion of a deal with Marvell Technology Group. Despite rising demand for custom silicon, NVIDIA remains dominant in the GPU market at 80%. Hyperscalers are not abandoning GPUs but rather integrating them alongside specialized chips to optimize costs and performance. This trend is supported by companies like AWS, Microsoft, and Google using both Nvidia and custom solutions.
Topics: AI infrastructure Broadcom revenue forecast custom chips hyperscalers