Technology · AI

Broadcom CEO Reiterates Ambitious AI Revenue Forecast Amid Stock Dip

Broadcom CEO Hock Tan has reaffirmed the company's projection of exceeding $100 billion in AI semiconductor revenue by fiscal year 2027, even as the company's stock trades significantly below its recent peak.

News AutomationCompiled 01:06 UTC · 1 min read

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Key Points

On Broadcom's June 3 earnings call, CEO Hock Tan reiterated guidance for more than $100 billion of AI semiconductor revenue in fiscal 2027, up from $56 billion expected this year.
At about $370 as of this writing, the stock is down about 25% from its 52-week high.
Broadcom reports fiscal third-quarter results on Wednesday, Sept. 2.

Broadcom (AVGO-0.74%) CEO Hock Tan put a number on the company's future months ago, and he has not walked it back. On the chip giant's June 3 earnings call, Tan said the company expects about $56 billion of artificial intelligence (AI) semiconductor revenue this fiscal year, up approximately 180% from fiscal 2025.

And then he went further.

"We reiterate our AI semiconductor revenue guidance to be in excess of $100 billion" for fiscal 2027, he told analysts.

The business behind the forecast delivered on the same call. AI semiconductor revenue reached $10.8 billion in the fiscal second quarter of 2026 (the period ended May 3), a 143% jump from a year earlier, with guidance calling for $16.0 billion in the third quarter.

The growth stock has traveled in the opposite direction. It trades near $370 as of this writing. The 52-week high is $495, which puts today's price about 25% below the peak.

So heading into Broadcom's fiscal third-quarter report on Wednesday, Sept. 2, the big question isn't the size of the forecast. It's what the market is discounting by paying far less for the same $100 billion promise.

Robotic arm processing silicon wafers in a semiconductor manufacturing facility

Image source: Getty Images.

The forecast is built on contracts

Tan's fiscal 2027 target is not a hope. On the June call, he walked through the commitments underneath it: a long-term agreement with Google parent Alphabet (GOOG +1.53%)( GOOGL +1.74%) covering multiple generations of its TPU chips, an arrangement giving Anthropic access to another 5 gigawatts of TPU-based compute beginning in 2027, and a contractual commitment to deploy 1.3 gigawatts for OpenAI next year. A partnership with Meta Platforms adds 3 gigawatts of custom chips through the end of 2028. And purchase orders totaling $6 billion had arrived from two additional customers as of the call, too.

Customers, if anything, were booking further out than they used to.

"During the quarter, bookings for AI semiconductors were over $30 billion against the $10.8 billion we shipped," Tan said.

Asked later why the backlog had grown so fast, he added, "Our visibility runs all the way to 2028 right now."

The price cut, measured

Because Tan's forecast hasn't moved, the drawdown has landed squarely on the price of the company's future profits. At its 52-week high, Broadcom traded at about 25 times the earnings analysts expect for fiscal 2027, on an adjusted basis -- the year the $100 billion forecast covers. Today it trades at about 19 times those same expected earnings.

That leaves the same forecast selling for about 25% less than it commanded at the peak. So what, specifically, is the market discounting?

Timing, concentration, or the number itself?

The candidates come down to three.

Timing is the most concrete. Tan said Broadcom plans to ship about 10 gigawatts of AI compute in fiscal 2027, weighted toward the back half of the year. A back-loaded ramp means the revenue that justifies today's price shows up late, and any slip pushes it into fiscal 2028. It also means a quarter or two of results could look ordinary while the forecast stays intact.

Concentration is the familiar one, and it has fresh evidence. On Aug. 19, Broadcom shares fell about 5% after Marvell Technology disclosed an expanded custom-chip agreement with Google, whose TPU chips Broadcom has long designed. Six core customers carry the AI number, so a shift at even one matters.

Still, nothing says Google is leaving. Broadcom announced its own long-term agreement in April covering multiple generations of TPUs, and these customers sign multiyear contracts, not one-off orders.

And the forecast itself is the hardest one to doubt. After all, doubting it means doubting signed agreements Tan has described in detail, plus bookings running at nearly three times shipments.

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Broadcom Stock Quote

NASDAQ: AVGO

Broadcom

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Moneyball Superscore

90/100

Today's Change

(-0.74%) $-2.75

Current Price

$368.79

Key Data Points

Market Cap

$1.8TMarket cap calculated using publicly traded shares outstanding only. Does not include unlisted, private, or dual-class non-traded shares. Implied market cap may vary.

Day's Range

$365.35 - $376.59

52wk Range

$287.17 - $495.00

Volume

16.6M

Avg Vol

26.1M

Gross Margin

65.66%

Dividend Yield

0.69%

To me, timing is the likeliest answer, with the Google question the newest one to watch. A back-half-loaded ramp facing a market that wants proof now is enough, on its own, to explain a drawdown like this -- no broken thesis required.

That is why the Sept. 2 report matters more than a typical quarter. The results will show how the $16 billion AI quarter came in, and the fiscal fourth-quarter guidance will show the state of the $56 billion full-year number, the base the fiscal 2027 ramp builds on. Those two numbers are the first hard checkpoints between June's promises and next year's $100 billion.

Ultimately, I view the stock as a hold here. The forecast, I think, is credible. And the drawdown has made it much cheaper to own. But a back-loaded ramp can test investors' patience for quarters at a time, and the valuation -- 19 times earnings that still have to be delivered -- is a discount only if the delivery happens. If the Sept. 2 report holds both numbers and the stock stays near today's level, I'd get more interested.