Broadcom just reminded everyone why the AI infrastructure buildout is the real deal — and it’s only accelerating.
The chip giant reported fiscal Q1 earnings Wednesday night that crushed estimates across the board. Revenue hit $19.3 billion, up 29% year-over-year. AI revenue alone? A staggering $8.4 billion — more than double what it pulled in during the same quarter last year. That 106% jump wasn’t a surprise to CEO Hock Tan, who had projected the doubling back in December. He delivered.
But the real headline came during the earnings call. Tan dropped a number that made analysts sit up straight: Broadcom now has “line of sight” to $100 billion in AI chip revenue by 2027. Just chips. Not software. Not services. Silicon.
Let that sink in. A single company expects to generate $100 billion annually from AI chips alone within two years. That’s roughly the entire GDP of Guatemala.
The guidance for Q2 was equally jaw-dropping. Broadcom expects $22 billion in revenue — well above the $20.56 billion Wall Street was modeling. Semiconductor solutions alone should hit $14.8 billion, smashing the $13.06 billion consensus. Adjusted profit margins are expected at 68%, above the 66% analysts anticipated.
What’s driving this? The custom chip business is on fire. Amazon, Google, Meta, and Microsoft are all designing their own AI silicon, and Broadcom is the company that helps translate those designs into actual chips. It’s the picks-and-shovels play for the custom AI accelerator arms race.
Tan revealed some fascinating details about specific customers. He called for one gigawatt of Google tensor processing units for Anthropic in 2026 and over three gigawatts in 2027. OpenAI is expected to deploy over one gigawatt of its first-generation custom chip in 2027. And Meta’s custom MTIA accelerator? “The roadmap is alive and well,” Tan said, with Meta targeting multiple gigawatts of custom accelerator capacity.
There was one soft spot: infrastructure software revenue came in at $6.8 billion, below the $7.02 billion consensus. But Tan addressed the elephant in the room head-on: “Our infrastructure software is not disrupted by AI.” He backed that up with guidance for 9% software revenue growth next quarter, up from just 1.4% growth this quarter. The VMware acquisition continues to pay dividends.
The board also authorized $10 billion in new share buybacks through 2026 — a massive vote of confidence.
Broadcom shares popped 5% after hours, clawing back some of their 8% decline year-to-date. In a market that’s been punishing anything tech-related, this report is a reminder that the AI infrastructure spending cycle isn’t slowing down — it’s just getting started. When the CEO of a $19 billion-a-quarter company tells you he can see $100 billion in AI chip revenue, the smart move is to pay attention.