Broadcom Targets $115 Billion AI Revenue by 2027
Broadcom is expanding its custom AI silicon business through long-term contracts with hyperscalers and $42 billion in new financing partnerships.
Broadcom Inc. is scaling its artificial intelligence infrastructure business through a custom silicon strategy, co-designing accelerators known as XPUs and Ethernet networking for frontier labs and hyperscalers. The company reported fiscal third-quarter revenue of $29.59 billion, with AI semiconductor revenue surging 221% to $16.70 billion. Management now projects AI semiconductor revenues will reach $115 billion by fiscal year 2027.
To support this growth, Broadcom has secured multi-generation contracts that provide revenue visibility into 2028. These include long-term agreements with Google for Tensor Processing Units and computing power commitments from Meta Platforms, OpenAI, and Anthropic. CEO Hock Tan described the demand for XPUs and networking as "simply insatiable."
Company leadership identified financing, rather than market demand, as the primary bottleneck for expansion. In response, Broadcom established $42 billion in financing partnerships and is pursuing institutional funding to support its customers while maintaining balance sheet stability. Despite these drivers, the company faces risks including high customer concentration and a demanding valuation of 36x FY2026 free cash flow.
