Broadcom Reports 221% Year-Over-Year Growth in AI Chip Revenue
In its fiscal third-quarter earnings report, Broadcom revealed a significant surge of 221% year-over-year growth in artificial intelligence (AI) semiconductor revenue to $16.7 billion as of September 2026. CEO Hock Tan highlighted strong demand for custom AI accelerators and networking solutions, with expectations that Q4 AI chip revenue will reach $21.7 billion—a 236% increase year-over-year. Despite this impressive growth, the stock's muted response may be due to slightly below-expectations total revenue guidance of $34.8 billion for fiscal Q4. Broadcom is a key design partner in major AI initiatives including Google’s Tensor Processing Units (TPUs), OpenAI’s Jalapeno chip, and Meta Platforms’ MTIA accelerator. The company anticipates delivering tens of billions of dollars worth of TPUs annually over the next several years, primarily for Alphabet's Google but with potential expansion to other hyperscalers. Broadcom updated its AI revenue outlook through fiscal 2028, aiming for $230 billion in annual AI chip sales—up from a trailing-12-month total of $89 billion. The stock currently trades at about 12 times the company’s fiscal 2028 earnings target. If this valuation multiple aligns with leading chip stocks trading closer to 25 times current-year estimates, investors could see substantial returns over the next two years.
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Topics: AI semiconductors Broadcom earnings data center spending