SAN FRANCISCO, March 5, 2026, 01:48 PST
Broadcom Inc (AVGO) now anticipates annual AI chip revenue topping $100 billion in 2027, with the company also projecting second-quarter revenue that beat Wall Street’s expectations. Shares climbed close to 5% in after-hours trading this Wednesday. “Our visibility in 2027 has dramatically improved,” Chief Executive Hock Tan told analysts during the post-earnings call. 1
The outlook arrives while cloud heavyweights keep funneling cash into data centers for generative AI—fueling appetite for chips, servers, and networking equipment. This year, Alphabet, Microsoft, Amazon, and Meta look set to pour a minimum of $630 billion into building out AI infrastructure—a rate that’s squeezing suppliers and favoring companies with serious scale. 2
Broadcom rarely creates a complete AI chip solo. Instead, the company collaborates on in-house projects—think Google’s tensor processing unit (TPU), a chip tailored for AI—or with OpenAI on their custom silicon. From there, Broadcom moves early-stage concepts to finished layouts, so manufacturers like Taiwan Semiconductor Manufacturing Co. can take over production 3 .
Broadcom reported a 29% jump in fiscal first-quarter revenue to $19.311 billion, with free cash flow coming in at $8.0 billion—roughly 41% of revenue. CEO Tan pointed to “AI revenue growth is accelerating,” as AI semiconductor sales totaled $8.4 billion, and the company is forecasting $10.7 billion in AI semiconductor revenue for the current quarter. The board signed off on a 65-cent quarterly dividend and authorized a fresh $10 billion buyback plan through Dec. 31, 2026. 4
Broadcom is guiding for second-quarter revenue around $22.0 billion, topping the $20.56 billion consensus from LSEG data. The infrastructure software unit didn’t keep pace—first-quarter growth landed at just 1%, or $6.80 billion, which stood out as the laggard in the company’s robust showing. 5
D.A. Davidson’s Gil Luria described Broadcom’s “into 2027” guidance as “very encouraging,” highlighting the company’s expectation for “significant growth in demand.” Broadcom typically sticks to projecting just the next quarter. 6
Tan broke down customer volume numbers using gigawatts — basically, shorthand for total deployed compute power. For AI startup Anthropic, Broadcom is targeting deliveries of around 1 gigawatt of TPUs in 2026, then scaling up to 3 gigawatts in 2027. As for OpenAI, Tan said Broadcom plans to ship its first AI chip in 2027, promising it will top 1 gigawatt in capacity. Addressing speculation about Meta’s custom chip program losing momentum, Tan was blunt: “We’re shipping now.” 7
The key issue: can AI infrastructure growth stay hot after this initial surge of data centres goes live? Broadcom shares have slid roughly 8% so far this year, ending Wednesday’s session in the red. Despite solid numbers throughout the sector, the report notes investors are starting to sweat over a potential AI bubble. 8
During the earnings call, Tan put Broadcom’s infrastructure software revenue forecast for this quarter at roughly $7.2 billion, and maintained that consolidated gross margin will remain close to 77%. The company also projected that adjusted EBITDA—a profitability metric stripping out interest, taxes, depreciation and amortization—should stick near 68% of revenue for the period. 9
