Broadcom‘s (NASDAQ:AVGO) AI machine is running at a pace that makes even the most bullish semiconductor forecasts look conservative.
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The company reported $8.4 billion in AI semiconductor revenue in Q1 FY2026, up 106% year over year — and that wasn’t even the headline.
CEO Hock Tan guided Q2 AI revenue to $10.7 billion, a figure that, annualized, puts Broadcom on track for more than $40 billion in AI chip sales this fiscal year alone.
Consider that the entire AI semiconductor market barely existed on Broadcom’s income statement three years ago.
$73 Billion AI Backlog
The foundation for the growth is custom silicon. Broadcom builds application-specific accelerators, known as XPUs, tailored precisely to the workload demands of individual hyperscalers.
Alphabet Inc.'s (NASDAQ:GOOGL) (NASDAQ:GOOG) Google has been a partner since 2014, with Broadcom designing at least seven generations of its Tensor Processing Units.
Meta Platforms' (NASDAQ:META) MTIA accelerator runs on Broadcom silicon.
So does infrastructure for Anthropic, ByteDance and OpenAI, which signed a multi-year collaboration in October 2025 for chips targeting deployment in the second half of 2026.
Apple Inc. (NASDAQ:AAPL) is widely expected to be next, reportedly partnering with Broadcom on a custom AI server chip codenamed Baltra.
The customer roster is what makes the numbers so striking — and what makes the forward projections harder to dismiss as hype.
Citi projects Broadcom’s total AI revenue will reach $115 billion in fiscal 2027 and $180 billion in fiscal 2028, which would represent roughly 81% of the company’s total sales.
Underpinning the outlook is a $73 billion AI backlog — larger than Broadcom’s entire fiscal 2025 revenue base — with delivery scheduled over approximately the next 18 months.
Broadcom’s Moat
Broadcom’s competitive moat is unusually deep. Custom chip design requires years of co-engineering with the customer, deep process-node expertise and the ability to manage an entire system.
Few companies can do all of it. Marvell Technology (NASDAQ:MRVL) is the closest competitor, but Broadcom holds first-mover advantage with the two largest AI spenders on the planet.
Heading into the Q2 print, the question isn’t whether Broadcom is an AI winner — it’s whether Broadcom stock’s 93.5x P/E already reflects the full runway.
If Citi’s numbers are even directionally right, the answer may still be no.
AVGO Price Activity: Broadcom shares were up 1.34% at $488.00 at the time of publication on Wednesday. The stock is trading near its 52-week high of $488.82, according to Benzinga Pro data.
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