The share price of the global technology company Broadcom soared on Wednesday after CEO Hock Tan announced that the firm’s AI chip revenue is anticipated to breach $100 billion.
During a conference call with analysts on Wednesday, Tan said that the company is eyeing to generate significant revenue from AI chips as the chipmaker continues to benefit from the artificial intelligence boom.
Custom Chips for AI Workload
The Palo Alto, California-based company’s XPU (eXtreme/Accelerator Processing Unit)—custom ASIC chips developed with clients including tech titans and Meta Platforms, are tailored for specialized AI workloads.
In December, Anthropic — the company behind the AI model Claude, placed $10 billion worth of custom chip orders from the company. Tan said that Broadcom anticipates AI chips to bring in significant revenue in 2027.
“We have line of sight to achieve AI revenue from chips, just chips, in excess of $100 billion in 2027,” Tan said, according to CNBC. “We have also secured the supply chain required to achieve this.”
Broadcom Revenue Up by 29%
Tan made the announcement as Broadcom unveiled the company's financial results for the first quarter of fiscal year 2026 ended February 1.
The company reported a revenue of $19,31 billion for the period, up by 29% from the prior year period. Tan said that the company achieved record revenue on continued strength in AI semiconductor solutions.
“Q1 AI revenue of $8.4 billion grew 106% year-over-year, above our forecast, driven by robust demand for custom AI accelerators and AI networking," Tan said. "Our AI revenue growth is accelerating, and we expect AI semiconductor revenue to be $10.7 billion in Q2."
Stock Price Up
On Wednesday, Broadcom’s stock price hit a high of $322.64.
The number represents a 2.8% increase from the previous close of $313.84.
