(Bloomberg) — Broadcom Inc. (AVGO) Chief Executive Officer Hock Tan said the company expects its AI chip sales to top $100 billion next year, marking major inroads into territory dominated by Nvidia Corp (NVDA).
“We have line of sight” to reach this milestone in 2027, he said during a conference call with analysts Wednesday. “We have also secured the supply chain required to achieve this.”
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The company projects that AI chip revenue will be $10.7 billion in the current quarter, so reaching an annual pace of $100 billion would be a major jump. Broadcom reported $20 billion in AI sales in 2025.
Broadcom shares gained about 6.8% in early trading on Thursday before markets opened in New York.
Tan has increasingly hitched Broadcom’s fortunes to AI. Though Nvidia remains the biggest maker of accelerators — the chips that help train and run artificial intelligence models — Broadcom has positioned itself as an alternative with its custom-made semiconductors. The company’s AI chip targets include both accelerators and networking semiconductors.
Broadcom also delivered a better-than-estimated quarterly outlook on Wednesday and announced a stock buyback plan worth as much as $10 billion.
Revenue will be about $22 billion in the fiscal second quarter, which ends May 3, the company said. Analysts had predicted $20.5 billion on average, though some projections topped $22 billion, according to data compiled by Bloomberg.
The company had faced skepticism about its AI prospects this year, with Broadcom shares falling 8.3% through the close.
Investors have grown more concerned about a bubble in artificial intelligence spending, and even a blockbuster earnings report from Nvidia last month led to a stock selloff. One key question is whether the current AI wave will extend beyond the next few years.
Broadcom had seen its valuation surge in recent years, helped by deals to make custom AI chips for companies like OpenAI and Anthropic PBC.
Its prospects have also benefited from increased interest in Google’s TPU, or tensor processing unit, a chip that Broadcom helps develop for the search giant. And Broadcom just shipped the first units of a new generation of processors that it said will be adopted by about a half-dozen more clients this year.
In the fiscal first quarter, which ended Feb. 1, sales rose to $19.3 billion. Profit was $2.05 a share, excluding some items. Analysts had projected revenue of $19.3 billion and earnings of $2.03 per share.