Broadcom Defends AI Revenue Targets Amid Sector Selloff

Broadcom Inc. reported record financial results and secured the supply necessary to double its AI semiconductor revenue annually over the next two years. Despite this growth, the company's shares fell nearly 5% on Monday, extending a monthly decline of over 14%. The selloff followed a weekend essay by Anthropic CEO Dario Amodei, supported by Sam Altman and Elon Musk, which urged AI companies to slow the development of powerful models due to safety concerns.

Hock Tan, CEO of Broadcom, defended the company's long-term targets, maintaining forecasts of $115 billion in AI semiconductor revenue for fiscal 2027 and $230 billion for fiscal 2028. Tan stated that demand for compute infrastructure and AI inference remains strong and durable. He noted that Anthropic is on track to become Broadcom's largest custom chip customer by 2027, surpassing Google.

Beyond the sector-wide volatility, Broadcom faces investor concerns over margin compression as the shift toward custom AI chips reduces the proportion of higher-margin software in its product mix. To support infrastructure for clients like Anthropic, Broadcom is reportedly negotiating a debt financing package between $60 billion and $100 billion with Blackstone and Apollo Global Management.