Broadcom's AI Chip Revenue Grew 221% Last Quarter. A $1,000 Investment a Year Ago Would Be Worth This Much Today.

A $1,000 investment in Broadcom (NASDAQ: AVGO) on Sept. 8, 2025, would be worth $1,070 (including dividends) as of the Sept. 8, 2026, market close.

That's a modest gain, but it doesn't reflect what's happening inside the business. In its fiscal third-quarter earnings release on Sept. 2, 2026, Broadcom said artificial intelligence (AI) semiconductor revenue surged 221% year over year to $16.7 billion.

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Even after that growth, the stock trades at about 12 times management's fiscal 2028 earnings target, which could be an attractive setup if the company's AI revenue continues to track higher.

Broadcom expects AI chip revenue to keep accelerating

"Demand for our custom AI accelerators and networking continues to be very strong," President and CEO Hock Tan said in the Sept. 2 release. "In Q4, the momentum continues, and we expect AI semiconductor revenue to accelerate to $21.7 billion, up 236% year over year."

One reason for the stock's muted response following earnings is that investors may have wanted a slightly stronger revenue outlook. Broadcom guided to $34.8 billion in total revenue for fiscal Q4, while some analysts were looking for $35 billion or more. Higher memory prices are also pressuring gross margin. Together, those issues may explain the muted reaction after earnings.

The bigger picture is that Broadcom sits near the center of the historic spending wave in data centers. It's the design partner for Google's Tensor Processing Units (TPUs), and it expects to ramp shipments of Ironwood TPU version 7 to Anthropic in Q4.

Broadcom is also the design partner for OpenAI's custom AI inference chip, Jalapeno, and Meta Platforms ' custom MTIA accelerator for inference and recommendation systems -- relationships that are helping power its AI revenue momentum.

On the fiscal Q3 call, Tan said Broadcom is planning to deliver "tens of billions of dollars of TPUs annually over the next several years." And that's for just one customer, Alphabet 's Google, suggesting the runway could be larger as Broadcom ships to other hyperscalers.

The stock trades at 12 times the fiscal 2028 earnings target

Broadcom updated its outlook through fiscal 2028 and now expects AI chip revenue to reach $230 billion. For context, the company's total trailing-12-month revenue is $89 billion.