Broadcom's AI Chip Revenue Expected to Exceed $100 Billion
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 4 days ago
0mins
Should l Buy MU?
Source: CNBC
- Doubling AI Revenue: Broadcom's AI revenue has more than doubled due to demand for AI accelerators and networking, with CEO Hock Tan projecting that AI chip revenue will be 'significantly in excess of $100 billion' by 2027, far exceeding Wall Street's bullish estimates and indicating strong demand and growth potential in the AI market.
- Capacity Expansion: The company is nearing 10 gigawatts of capacity, with analysts estimating revenue of $12 billion to $15 billion per gigawatt by 2027, which is expected to drive substantial revenue growth and further solidify Broadcom's leadership position in the semiconductor industry.
- Supply Chain Assurance: Despite facing shortages in high-bandwidth memory, Tan assured analysts that the company has secured memory and leading-edge wafer supply through 2028, which will support ongoing growth and alleviate concerns about profitability.
- Competitive Market Advantage: Tan emphasized that Broadcom's AI chips offer cost and performance advantages over competitors like Nvidia, which is expected to attract more hyperscaler customers and ensure the company's market share and profitability in the coming years.
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Analyst Views on MU
Wall Street analysts forecast MU stock price to fall
26 Analyst Rating
24 Buy
2 Hold
0 Sell
Strong Buy
Current: 370.300
Low
235.00
Averages
336.12
High
500.00
Current: 370.300
Low
235.00
Averages
336.12
High
500.00
About MU
Micron Technology, Inc. provides memory and storage solutions. The Company delivers a portfolio of high-performance dynamic random-access memory (DRAM), NAND, and NOR memory and storage products through its Micron and Crucial brands. The Company's products enable advancing in artificial intelligence (AI) and compute-intensive applications. Its segments include Compute and Networking Business Unit (CNBU), Mobile Business Unit (MBU), Embedded Business Unit (EBU), and Storage Business Unit (SBU). CNBU segment includes memory products and solutions sold into the data center, PC, graphics, and networking markets. MBU segment includes memory and storage products sold into the smartphone and other mobile-device markets. EBU segment includes memory and storage products and solutions sold into the intelligent edge through the automotive, industrial, and consumer embedded markets. SBU segment includes SSDs and component-level storage solutions sold into the data center, PC, and consumer markets.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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- Memory Price Forecast: Citi analysts project that DRAM average selling prices will increase by 171% year-over-year by 2026, with NAND prices also expected to rise by 127%, driven by robust demand from data centers and eSSD, highlighting Micron's competitive position in the market.
- Market Cycle Analysis: Analysts noted that the key investor debate surrounding Micron is whether we are in an extended memory cycle akin to the 1990s Windows PC DRAM cycle, particularly given strong AI demand and limited new fab capacity, which could impact future price trends.
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- Significant Asset Growth: Since its launch in 2023, Autopilot has seen its assets soar from $2 million to $1.3 billion, indicating strong appeal among retail investors, particularly with 40% of assets allocated to popular meme portfolios, reflecting market acceptance of inverse investment strategies.
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- Energy Market Dynamics: West Texas Intermediate crude briefly surged to $119 per barrel before retreating to around $96, primarily due to output cuts from Middle Eastern producers and the continued closure of the Strait of Hormuz, leading to increased market volatility.
- Strong Tech Stock Performance: Despite broader market pressures, technology stocks like Broadcom rose over 3%, while Nvidia, AMD, and Micron Technology surged by 12.6%, reflecting investor confidence in the tech sector.
- Rising Inflation Risks: Analysts warned that prolonged oil supply disruptions could heighten inflation risks and constrain economic growth, potentially putting pressure on Federal Reserve policy decisions.
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- Surging Market Demand: Nvidia's unprecedented demand for GPUs has significantly boosted the demand for Micron Technology's high-bandwidth memory (HBM), DRAM, and NAND processors, although Micron faces persistent shortages of data center memory chips, which may adversely affect its market performance.
- Competitor Supply: Nvidia's flagship Vera Rubin chip will source HBM4 memory chips from SK Hynix and Samsung Electronics, with SK Hynix expected to supply over 50% of Nvidia's total HBM supply, indicating increased competitive pressure on Micron in the market.
- Market Share Analysis: According to Counterpoint Research, SK Hynix and Samsung Electronics hold 34% and 33% of the HBM market share respectively, while Micron ranks third with a 26% share, highlighting the challenges Micron faces in the high-end memory market.
- Investment Opportunity: Despite Micron's stock price declining 13% from its peak, the company is expected to grow its revenue by 109% this year, with a forward P/E ratio of 11, indicating that there are still investment opportunities amidst uncertainty, attracting attention to its future growth potential.
See More
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- Intensifying Market Competition: Micron, a key supplier to Nvidia, faces competition from SK Hynix and Samsung Electronics, which will be the sole suppliers of HBM4 for Nvidia's new flagship Vera Rubin chip, potentially impacting Micron's market share.
- Sustained Demand Growth: Despite competition, demand for Micron's high-bandwidth memory (HBM), DRAM, and NAND processors remains strong, with an estimated $700 billion in capital expenditures earmarked for AI data centers in 2026, ensuring opportunities for Micron in other memory chip markets.
- Price Surge Expectations: Citi analysts predict that prices for certain memory chips will skyrocket by 171% due to persistent data center demand and shortages, providing Micron with additional market space, even though its role in the Vera Rubin chip may be limited.
- Emerging Investment Opportunities: Micron's stock has fallen 13% from its peak, with a current P/E ratio of 36 times earnings, but a more reasonable forward multiple of 11 times, alongside an expected revenue growth of 109% this year, presenting a relatively attractive entry point for investors.
See More
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Market Trends: The S&P 500 has experienced a decline of about 2% year-to-date in 2026, with increasing volatility leading investors to seek more stable investment options, such as defensive exchange-traded funds (ETFs).
Investment Strategies: ETFs that focus on low volatility and strong cash flow are gaining attention as they may provide stability during market fluctuations, with some funds offering attractive dividend yields.
Performance Comparison: The USMV (Low-Volatility Fund) has outperformed the broader market with a year-to-date return of around 5%, while the VLUE (Value Fund) has also shown strong performance, yielding about 8% year-to-date.
Investor Recommendations: Analysts suggest that investors consider specific stocks and ETFs that are currently recommended for purchase, emphasizing the importance of being cautious about overexposure to individual companies in a volatile market.
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