Broadcom's AI Chip Sales Surge
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 1h ago
0mins
Should l Buy AVGO?
Source: NASDAQ.COM
- Significant Revenue Growth: Broadcom's revenue surged from $23.9 billion in fiscal 2020 to $63.9 billion in fiscal 2025, reflecting a 22% CAGR that underscores its robust performance and growth potential in the AI market.
- AI Chip Sales Surge: In fiscal 2025, Broadcom's AI chip revenue skyrocketed by 65% to $20 billion, accounting for 31% of total revenue, effectively offsetting the slower growth in its non-AI chip and infrastructure software segments.
- Optimistic Market Outlook: Broadcom aims to achieve annualized AI chip revenues between $60 billion and $90 billion by fiscal 2027, primarily driven by three hyperscale customers, indicating strong demand for custom AI accelerators among major cloud companies.
- Ongoing Acquisition Strategy: Broadcom is expected to continue acquiring companies to bolster its AI chip and infrastructure software businesses, with projected revenue and adjusted EBITDA growth rates of 38% and 36% respectively from fiscal 2025 to 2028, further solidifying its market position.
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Analyst Views on AVGO
Wall Street analysts forecast AVGO stock price to rise over the next 12 months. According to Wall Street analysts, the average 1-year price target for AVGO is 462.58 USD with a low forecast of 390.00 USD and a high forecast of 525.00 USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.
28 Analyst Rating
27 Buy
1 Hold
0 Sell
Strong Buy
Current: 342.760
Low
390.00
Averages
462.58
High
525.00
Current: 342.760
Low
390.00
Averages
462.58
High
525.00
About AVGO
Broadcom Inc. is a global technology firm that designs, develops, and supplies a range of semiconductors, enterprise software and security solutions. The Company operates through two segments: semiconductor solutions and infrastructure software. Its semiconductor solutions segment includes all of its product lines and intellectual property (IP) licensing. It provides a variety of radio frequency semiconductor devices, wireless connectivity solutions, custom touch controllers, and inductive charging solutions for mobile applications. Its infrastructure software segment includes its private and hybrid cloud, application development and delivery, software-defined edge, application networking and security, mainframe, distributed and cybersecurity solutions, and its FC SAN business. It provides a portfolio of software solutions that enable customers to plan, develop, automate, manage and secure applications across mainframe, distributed, mobile and cloud platforms.
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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- Opportunities for Nvidia and Broadcom: As major computing unit suppliers, Nvidia and Broadcom are expected to benefit from this massive spending, with analysts projecting a 52% revenue growth for both companies this fiscal year, highlighting that the AI boom is far from over.
- Market Reaction Misalignment: Despite the decline in Nvidia and Broadcom's stock prices due to market sentiment, investors should seize the current undervalued buying opportunity, especially as Nvidia's P/E ratio stands at 24 times, significantly lower than Broadcom's 32 times.
- Technological Collaboration Driving Growth: The soaring demand for Broadcom's TPU chips, developed in collaboration with Alphabet, is expected to further boost Broadcom's sales, reflecting the increasing need for custom chips among AI hyperscalers.
See More
Broadcom's Growth Potential Remains Strong
- Significant Revenue Growth: Broadcom's revenue grew at a 22% CAGR from $23.9 billion to $63.9 billion from fiscal 2020 to 2025, demonstrating strong performance in the AI market and sustained demand.
- Surge in AI Chip Sales: In fiscal 2025, Broadcom's AI chip revenue surged 65% to $20 billion, accounting for 31% of total revenue, effectively offsetting slower growth in non-AI chip and infrastructure software businesses, indicating its competitiveness in the customized AI accelerator market.
- Optimistic Future Outlook: Broadcom aims to achieve annualized AI chip revenues of $60 billion to $90 billion by fiscal 2027, primarily from three hyperscale customers, reflecting strong demand from cloud giants for Broadcom's custom AI accelerators and further solidifying its market position.
- Ongoing Acquisition Strategy: Broadcom plans to continue acquiring more companies to bolster its AI chipmaking and infrastructure software businesses, with analysts projecting revenue and adjusted EBITDA growth at CAGRs of 38% and 36% from fiscal 2025 to 2028, highlighting its long-term expansion potential in mobile, automotive, and industrial sectors.
See More
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- Significant Revenue Growth: Broadcom's revenue surged from $23.9 billion in fiscal 2020 to $63.9 billion in fiscal 2025, reflecting a 22% CAGR that underscores its robust performance and growth potential in the AI market.
- AI Chip Sales Surge: In fiscal 2025, Broadcom's AI chip revenue skyrocketed by 65% to $20 billion, accounting for 31% of total revenue, effectively offsetting the slower growth in its non-AI chip and infrastructure software segments.
- Optimistic Market Outlook: Broadcom aims to achieve annualized AI chip revenues between $60 billion and $90 billion by fiscal 2027, primarily driven by three hyperscale customers, indicating strong demand for custom AI accelerators among major cloud companies.
- Ongoing Acquisition Strategy: Broadcom is expected to continue acquiring companies to bolster its AI chip and infrastructure software businesses, with projected revenue and adjusted EBITDA growth rates of 38% and 36% respectively from fiscal 2025 to 2028, further solidifying its market position.
See More
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- Improved Profitability: TSMC achieved a gross margin of 60% in 2025, expected to remain above 56% in the coming years, indicating robust pricing power and profitability amid soaring AI chip demand.
- Future Growth Expectations: TSMC anticipates nearly 30% revenue growth in 2026, with a projected CAGR approaching 25% from 2024 to 2029, reflecting its long-term growth potential in the AI market.
- Strategic Expansion Plans: TSMC plans to ramp up production of its 2nm chips in the second half of 2026 while expanding overseas plants in Japan, the U.S., and Europe to mitigate risks from potential Taiwan-China tensions, ensuring its competitive edge and supply chain security.
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- Surge in Capital Expenditures: Amazon plans to spend $200 billion in 2026, with Alphabet and Meta at $185 billion and $135 billion respectively, totaling over $500 billion, indicating that AI infrastructure development is accelerating despite market skepticism about AI spending.
- Opportunities for Nvidia and Broadcom: As major computing unit suppliers, Nvidia and Broadcom are expected to benefit from this massive spending, with analysts projecting a 52% revenue growth for both companies this fiscal year, highlighting that the AI boom is far from over.
- Market Reaction Misalignment: Despite the decline in Nvidia and Broadcom's stock prices due to market sentiment, investors should seize the current undervalued buying opportunity, especially as Nvidia's P/E ratio stands at 24 times, significantly lower than Broadcom's 32 times.
- Technological Collaboration Driving Growth: The soaring demand for Broadcom's TPU chips, developed in collaboration with Alphabet, is expected to further boost Broadcom's sales, reflecting the increasing need for custom chips among AI hyperscalers.
See More
Broadcom's Growth Potential Remains Strong
- Significant Revenue Growth: Broadcom's revenue grew at a 22% CAGR from $23.9 billion to $63.9 billion from fiscal 2020 to 2025, demonstrating strong performance in the AI market and sustained demand.
- Surge in AI Chip Sales: In fiscal 2025, Broadcom's AI chip revenue surged 65% to $20 billion, accounting for 31% of total revenue, effectively offsetting slower growth in non-AI chip and infrastructure software businesses, indicating its competitiveness in the customized AI accelerator market.
- Optimistic Future Outlook: Broadcom aims to achieve annualized AI chip revenues of $60 billion to $90 billion by fiscal 2027, primarily from three hyperscale customers, reflecting strong demand from cloud giants for Broadcom's custom AI accelerators and further solidifying its market position.
- Ongoing Acquisition Strategy: Broadcom plans to continue acquiring more companies to bolster its AI chipmaking and infrastructure software businesses, with analysts projecting revenue and adjusted EBITDA growth at CAGRs of 38% and 36% from fiscal 2025 to 2028, highlighting its long-term expansion potential in mobile, automotive, and industrial sectors.
See More
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- Significant Revenue Growth: Broadcom's revenue surged from $23.9 billion in fiscal 2020 to $63.9 billion in fiscal 2025, reflecting a 22% CAGR that underscores its robust performance and growth potential in the AI market.
- AI Chip Sales Surge: In fiscal 2025, Broadcom's AI chip revenue skyrocketed by 65% to $20 billion, accounting for 31% of total revenue, effectively offsetting the slower growth in its non-AI chip and infrastructure software segments.
- Optimistic Market Outlook: Broadcom aims to achieve annualized AI chip revenues between $60 billion and $90 billion by fiscal 2027, primarily driven by three hyperscale customers, indicating strong demand for custom AI accelerators among major cloud companies.
- Ongoing Acquisition Strategy: Broadcom is expected to continue acquiring companies to bolster its AI chip and infrastructure software businesses, with projected revenue and adjusted EBITDA growth rates of 38% and 36% respectively from fiscal 2025 to 2028, further solidifying its market position.
See More
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- Market Value Loss: On Thursday, Wall Street's tech sector saw over $500 billion wiped off market value across 10 major companies, indicating a sharp decline in investor confidence amid simultaneous pressures on both software and hardware sectors.
- Cisco Earnings Impact: Cisco's stock plummeted 11% despite reporting earnings of $1.04 per share, exceeding expectations, as the company’s gross margin guidance of 65.5%-66.5% fell short of the 68% consensus, highlighting the impact of rising hardware costs.
- Memory Shortage Risks: Lenovo confirmed mounting pressure on PC shipments, with CEO Yang Yuanqing stating that while unit pressures are expected, the company aims to maintain profitability, reflecting growing concerns over memory shortages in the industry.
- Software Sector Decline: The iShares Expanded Tech-Software Sector ETF dropped over 3% on Thursday, with the sector down over 20% year-to-date, illustrating the ongoing impact of fears surrounding AI disruption on software stock performance.
See More
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- Significant Revenue Growth: In 2025, TSMC's revenue increased by 36% in USD terms, with high-performance computing (HPC) revenue surging 48% and accounting for 58% of total revenue, highlighting its strong demand and market dominance in the AI chip sector.
- Improved Profitability: TSMC achieved a gross margin of 60% in 2025, expected to remain above 56% in the coming years, indicating robust pricing power and profitability amid soaring AI chip demand.
- Future Growth Expectations: TSMC anticipates nearly 30% revenue growth in 2026, with a projected CAGR approaching 25% from 2024 to 2029, reflecting its long-term growth potential in the AI market.
- Strategic Expansion Plans: TSMC plans to ramp up production of its 2nm chips in the second half of 2026 while expanding overseas plants in Japan, the U.S., and Europe to mitigate risks from potential Taiwan-China tensions, ensuring its competitive edge and supply chain security.
See More
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- Earnings Report Anticipation: Investors are optimistic as the company approaches its earnings report scheduled for later this month.
See More
