With AI Revenue Set to Surge 400% Over the Next 2 Years, Broadcom Stock Looks Like a Buy on Recent Dip

With its artificial intelligence (AI) revenue surging and its stock recently stuck in the mud, Broadcom (NASDAQ: AVGO) is starting to look like one of the most attractive stocks in the AI infrastructure space. The designer, developer, manufacturer, and global supplier of semiconductor products is poised to see explosive growth in the coming years, with AI revenue projected to double in fiscal 2027 to $115 billion, up from earlier guidance of $100 billion, and then double again in fiscal 2028 to $230 billion.

Let's take a closer look at Broadcom's recent results and why the semiconductor stock looks like a great buy at current levels.

Missed Nvidia in 2009? This Rare Signal Is Flashing Again. In 2009, a "Double Down" signal flashed for a little-known chipmaker called Nvidia. For the first time in years, that same "Total Conviction" signal is flashing for a company 1/100th the size of Nvidia. Continue »

Broadcom saw its AI semiconductor revenue skyrocket 221% year over year in fiscal Q3 ended Aug. 2. During the quarter, it delivered mass shipments of Ironwood TPU v7 chips to both Alphabet and Anthropic and began shipping Alphabet's next-generation Tensor Processing Units (TPUs) v8i to the company. Broadcom said it is handling Alphabet's TPU 8i version for inference , while MediaTek is dealing with the v8t version for training. Notably, it brought the 8i version to market more quickly than MediaTek, despite a later start.

The real story, though, was the company's outlook. The $230 billion AI revenue estimate for fiscal 2028 was well above the $180 billion estimate previously projected by Citigroup analysts. Meanwhile, it said its AI networking business would grow just as quickly as its custom chip business.

The company laid out where this revenue would come from, saying Anthropic would become its largest customer next fiscal year, with the frontier lab planning to deploy 5 gigawatts of TPU version 8i in fiscal 2027 and then 10 gigawatts in fiscal 2028. Alphabet will continue to be one of its most important customers, with it generating tens of billions of dollars in TPU revenue annually in the coming years.

OpenAI, meanwhile, is projected to become its second-largest chip customer, with 5 gigawatts of its new Jalapeño chip and its successor expected to be deployed in 2028. It will also deliver Meta Platforms 3 gigawatts of its custom MTIA chips through 2028, covering three generations.

Broadcom noted that its fiscal 2027 AI revenue could be higher, with demand currently above its $115 billion revenue projection, but that it needs to improve supply. For 2028, though, it has secured supply to meet its outlook. Given its huge AI revenue growth over the next two years, Broadcom now expects to generate adjusted EPS of over $30 in fiscal 2028.