Broadcom’s $230 Billion AI Bet Wins Cheers—But Not Full Investor Trust

Broadcom’s $230 Billion AI Bet Wins Cheers—But Not Full Investor Trust
Broadcom sees custom AI chips becoming a vast, durable business built around the biggest AI labs. Investors see the same opportunity, but remain uneasy over whether financing structures, customer concentration and real-world infrastructure can support the forecast.

The chipmaker reported fiscal third-quarter revenue of $29.59 billion and adjusted earnings of $3.32 a share, both ahead of consensus expectations. Its semiconductor business was the engine: AI-related semiconductor revenue rose 221% year over year to $16.7 billion, as Broadcom supplied custom processors and networking equipment for the generative-AI buildout.

On Wednesday’s earnings call, CEO Hock Tan sharpened the company’s long-range pitch. Broadcom now expects AI revenue of $58 billion in fiscal 2026, $115 billion in 2027 and $230 billion in 2028. The plan rests on expanding deployments with Google, Anthropic, OpenAI and Meta. Tan said, “Shipments of Jalapeno for OpenAI will continue, and for Meta, we expect production shipments” of Meta’s custom accelerator.

The forecast also depends on unusually large commitments: Broadcom expects Anthropic to deploy 5 gigawatts of TPU 8i chips in 2027, while OpenAI is targeted for a 1.3-gigawatt Jalapeno deployment. To help AI labs finance such buildouts, Broadcom has established an SPV platform with Apollo and Blackstone aimed at facilitating more than 20 gigawatts of compute infrastructure by the end of 2028.

That scale produced a mixed market reaction. Investors initially found the $115 billion 2027 goal less ambitious than hoped, but the $230 billion 2028 projection exceeded the cited $177 billion consensus estimate. Still, the more cautious view is that the revenue path is constrained not only by chip supply, but by land, power and data-center capacity—and carries risks tied to circular financing, a handful of frontier-lab customers and political resistance to data centers. The investment club behind the analysis kept a hold-equivalent rating while cutting its price target to $430 from $480.

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