News / US / cnbc
Broadcom Shares Navigate Volatility as AI Revenue Projections Soar to $230B by 2028
Electronic Technology · Semiconductors · cnbc · 2026-09-02
AVGO, GOOGL, META, SOXX, BX, APO, NVDA, MRVL, IGPT
Broadcom beat quarterly earnings expectations and raised its long-term AI revenue outlook, projecting a significant surge in demand for its custom silicon chips.
What Happened
Earnings Performance and AI Growth: Broadcom reported a strong fiscal third quarter for 2026, with revenue climbing 85% year-over-year to $29.59 billion and adjusted EPS reaching $3.32. The company's AI semiconductor segment was a standout performer, surging 221% compared to the previous year as demand for custom XPUs continues to accelerate.
Long-Term Revenue Outlook: CEO Hock Tan provided an ambitious roadmap, forecasting AI-related revenue to reach $115 billion in fiscal 2027 and doubling to $230 billion by 2028. This long-term guidance significantly exceeded FactSet consensus estimates, signaling robust confidence in the company's ability to scale its infrastructure and chip production.
Strategic Partnerships and Financing: Broadcom is deepening its ties with major AI players like Anthropic, OpenAI, and Meta Platforms to drive future deployments. To support these capital-intensive projects, the firm launched a special purpose vehicle with Apollo and Blackstone, aiming to facilitate over 20 GW of compute infrastructure by the end of 2028.
Market Reaction and Valuation: Despite the positive long-term outlook, Broadcom shares experienced volatility as investors weighed the company's guidance against broader semiconductor sector valuation concerns. While the stock trades at a modest multiple of roughly 12 times projected 2028 earnings, analysts remain cautious, leading to a downward adjustment in price targets due to shifting market sentiment.