Broadcom Projects $100 Billion AI Revenue Amid Market Slide

Shares of Broadcom Inc. have fallen approximately 25% from a 52-week high of $494.18 to $370.34, underperforming the PHLX Semiconductor Index. The decline follows broader market rotations and investor concerns regarding hyperscaler capital expenditure, leaving the company as a concentrated bet on AI chips rather than a diversified play.

Despite the stock slide, CEO Hock Tan guided for $100 billion in AI revenue for fiscal year 2027, reporting $30 billion in AI bookings against $11 billion shipped. Growth is driven by custom AI accelerators for clients including Meta Platforms, OpenAI, and Anthropic, as well as margin expansion from VMware's transition to subscription-based software. AI semiconductor revenue increased 143% year-on-year last quarter, positioning the company as the second-largest AI chip provider after NVIDIA.

However, the company faces mounting technical and competitive pressures. Google, previously a sole partner for Broadcom's tensor processing units, has diversified its supply chain by partnering with MediaTek and signing a long-term deal with Marvell Technology. Marvell expects its agreement with Google to generate $120 billion in revenue through fiscal year 2033. Analysts note that Broadcom's reliance on customized designs for specific customers creates risk, as these designs are difficult to transfer if a client falters.