Broadcom’s AI Revenue Soars 106% as Company Eyes $100 Billion Chip Target by 2027

Quick Facts

• AI revenue jumped 106% year-over-year to $8.4 billion in Q1 2026
• CEO projects AI chip revenue will exceed $100 billion in 2027
• Major partnerships include $10 billion Anthropic order and multi-gigawatt deployments with Google and OpenAI

Broadcom reported Q1 2026 revenue of $19.31 billion, beating analyst estimates of $19.21 billion with adjusted earnings per share of $2.05 versus the expected $2.02. The semiconductor giant’s standout performance came from AI revenue, which soared 106% year-over-year to $8.4 billion.

CEO Hock Tan attributed the growth to “robust demand for custom AI accelerators and AI networking.” The company’s Semiconductor Solutions segment generated $12.52 billion in Q1 revenue, up 52% year-over-year and ahead of the $12.25 billion analysts expected.

Broadcom provided aggressive guidance for the year ahead. The company expects AI semiconductor revenue of $10.7 billion for Q2 2026 and total Q2 revenue of approximately $22 billion, significantly above Street expectations of $20.39 billion.

The earnings revealed massive scale in Broadcom’s AI partnerships. Tan disclosed that Google ordered one gigawatt of tensor processing units for Anthropic in 2026, with over three gigawatts planned for 2027. OpenAI is expected to deploy over one gigawatt of its first-generation custom chip in 2027. In December, Anthropic placed a $10 billion custom chip order.

Broadcom has positioned itself as a key alternative to Nvidia for hyperscale cloud providers developing application-specific integrated circuits. By partnering with Broadcom to develop custom ASICs, hyperscalers can optimize hardware for their specific AI models, eventually bypassing Nvidia’s expensive, general-purpose chips.

The strategic shift toward ASICs benefits Broadcom’s business model. Industry analysts note that by early 2026, more than 70% of AI data center revenue shifted from training to inference workloads, which favor Broadcom’s custom ASICs that offer superior cost efficiency and power performance.

Broadcom generated $8.0 billion in free cash flow in Q1, representing 41% of revenue. The company returned $10.9 billion to shareholders through $3.1 billion in dividends and $7.8 billion in stock repurchases. The board authorized up to $10 billion in new share buybacks through 2026.

Shares climbed more than 4.6% in after-hours trading following the earnings announcement. Despite the strong results, Broadcom shares remained down 8% year-to-date as of Wednesday’s close. Analysts maintain a consensus Strong Buy rating with an average price target of $449.46, representing 40.98% upside potential.

Looking ahead, Tan said Broadcom’s visibility “in 2027 has dramatically improved” with “line of sight” to achieve AI revenue from chips exceeding $100 billion in 2027, representing “close to 10 gigawatts” in power terms.

Read more: Broadcom’s AI chip business jumps 106% as it cruises to another solid earnings and revenue beat