Broadcom shares climbed roughly 7% in premarket trading after the company forecasted that sales of its artificial intelligence chips will exceed $100 billion in 2027. The guidance accompanies plans to supply substantial tensor processing capacity to major AI customers and stronger-than-expected near-term revenue guidance.
The company said it expects to deliver 3 gigawatts worth of tensor processing units for AI workloads to Anthropic in 2027, and to ship OpenAI’s first AI chip in the same year with shipments exceeding 1 gigawatt. Those anticipated volumes, Broadcom said, bring its AI chip business closer to the scale of recent deals secured by rivals such as Nvidia and AMD.
Broadcom also flagged a second-quarter revenue projection of about $22 billion, which is above the analyst consensus average of $20.56 billion compiled by LSEG. For the quarter, the company expects AI chip revenue to reach $10.7 billion. In addition to the revenue outlook, Broadcom announced a new share repurchase program of up to $10 billion through the end of the year.
The firm’s forecasts arrive amid a broader surge in infrastructure investment tied to artificial intelligence. Big technology companies including Alphabet, Microsoft, Amazon and Meta are expected to spend more than $600 billion this year to build AI infrastructure, a trend that is driving demand for chips, servers, storage and networking gear.
Investors have weighed this wave of AI-related spending against questions about whether the investments will produce sufficient returns, a dynamic that has contributed to notable price swings among the largest technology companies. Broadcom’s stock has fallen about 8.3% so far this year, while Nvidia’s shares are down about 2% year-to-date.
"The AI spend overhang will still linger, but Broadcom made a strong case for their AI revenue to outgrow the market," analysts at Jefferies said.
The company’s message has also attracted attention from AI-driven investment research tools. ProPicks AI evaluates AVGO alongside thousands of other companies each month using more than 100 financial metrics. The service says it uses AI to screen for stock ideas by assessing fundamentals, momentum and valuation without popularity bias, and cites past winners including Super Micro Computer (+185%) and AppLovin (+157%).
Market participants will be watching whether Broadcom can translate the projected volume commitments into sustained revenue growth and improved returns for shareholders, and whether the broader industry can justify high valuations on the back of heavy capital spending into AI infrastructure.