Full Breakdown
Broadcom’s AI Semiconductor Outlook Through 2028
By Drooid · · How we work
Projected AI Semiconductor Revenue
Chief Executive Officer Hock Tan told investors that Broadcom expects its AI semiconductor revenue to double to roughly $115 billion in fiscal 2027 and to double again to $230 billion in fiscal 2028. The company said it has already secured supply to meet those targets. For reference, Broadcom’s AI semiconductor revenue was about $16.7 billion in the most recent quarter, indicating a projected growth trajectory of more than tenfold over the next two years.
Broadcom’s AI Chip Strategy
Broadcom’s primary AI exposure comes from custom AI chips designed for hyperscale cloud providers. While graphics processing units remain the industry standard, Broadcom is partnering with AI hyperscalers—including Alphabet, Meta Platforms, OpenAI and Anthropic—to develop chips optimized for specific workloads. The firm argues that this approach offers performance advantages and has generated advance orders that provide visibility into future demand.
Valuation and Investor Outlook
Analysts note that Broadcom’s stock trades at under 18 times forward earnings, a multiple that could rise to around 30 times trailing earnings if the projected revenue surge materializes. The analysis suggests that the market has not yet priced in the anticipated doubling of AI semiconductor revenue in 2028, creating what is described as a “screaming buy” opportunity for investors willing to adopt a long-term perspective.
Key Data Points
- Market Capitalization: Approximately $1.7 trillion (based on publicly traded shares).
- Current Share Price: About $362 per share.
- Gross Margin: 66.5 %.
- Dividend Yield: 0.73 %.
- Recent Trading Range: $356 – $364; 52-week range $290 – $495.
The combination of secured supply, custom-chip partnerships, and a low valuation relative to projected earnings underpins the bullish outlook for Broadcom’s AI semiconductor business through 2028.