Broadcom AI Revenue Forecast Signals Hyperscaler Shift Beyond Nvidia

Broadcom has sharply raised its AI revenue projections, signaling that the world's largest technology companies are broadening their chip procurement strategies beyond Nvidia's dominant GPU offerings.

The custom AI chipmaker now expects AI chip revenue of approximately $115 billion in fiscal year 2027, ending in October of that year, up from a previous forecast exceeding $100 billion. The company projects that figure will double to roughly $230 billion in fiscal 2028, according to details first reported by Yahoo Finance.

Why it matters

Broadcom's aggressive forecast reveals a fundamental shift in how hyperscalers are building AI infrastructure. Rather than relying exclusively on expensive off-the-shelf processors, major cloud providers are investing heavily in custom silicon and integrated networking solutions that give them greater control over costs and performance. This diversification strategy has significant implications for the competitive landscape in AI hardware, suggesting the market is expanding beyond a single-vendor model.

Hyperscalers Seek Custom Solutions

The revenue outlook reflects growing demand from hyperscalers for suppliers that can deliver both specialized processors and the networking components that connect them. These companies want chips designed for specific workloads, allowing them to optimize economics and reduce dependence on any single vendor.

Broadcom President and CEO Hock Tan confirmed that demand for the company's custom AI accelerators and networking infrastructure continues to exceed supply. In the company's fiscal Q3 2026 earnings report, Tan noted surging orders from major customers including OpenAI, Meta, Google, and Anthropic.

KeyBanc analyst John Vinh, who maintained an Overweight rating and $575 price target on Broadcom following the forecast, highlighted that Anthropic and OpenAI are projected to become the company's largest customers by fiscal 2028. This would give Broadcom revenue visibility beyond its established relationship with Google.

Competition Intensifies

The custom chip market is becoming increasingly competitive. Google recently expanded its partnership with Marvell, with some analysts suggesting Broadcom may be losing share in Google's TPU programs. While the Marvell deal doesn't aim to displace Broadcom entirely, it underscores that no supplier's position is guaranteed.

Broadcom reported strong fiscal third-quarter results, with revenue climbing 86 percent year-over-year to approximately $29.6 billion, exceeding Wall Street expectations. However, the company's fourth-quarter guidance of roughly $34.8 billion came in slightly below the $35 billion analyst consensus, a detail flagged in KeyBanc's research note.

The forecast demonstrates that AI infrastructure spending by hyperscalers shows no signs of slowing, even as they pursue multiple hardware strategies simultaneously. Details of Broadcom's updated projections were first reported by Yahoo Finance.