Broadcom, now worth $2.1 trillion, has quietly become the second-most important AI chip company after Nvidia, with AI revenue more than doubling to $8.4 billion in its latest quarter.

In fiscal Q1 2026 (ended Feb. 1, 2026), Broadcom's revenue rose 29% year over year to $19.3 billion, with AI revenue alone soaring 106% to $8.4 billion. The custom-accelerator business climbed 140%, and AI networking revenue, up 60%, now makes up a third of all AI sales.

Unlike Nvidia, which sells general-purpose GPUs off the shelf, Broadcom co-designs custom AI accelerators (chips tailored to a single company's workloads) and sells networking silicon that connects thousands of those chips into one cluster. It builds these custom chips for six large customers, including Google, Meta, Anthropic, and OpenAI.

Management has told investors it sees a path to more than $100 billion in AI chip revenue in 2027 and has already secured the manufacturing capacity to deliver through 2028. The company guided for revenue to jump 47% year over year in the following quarter, to $22 billion, with AI chip sales accelerating to $10.7 billion.

The stock trades at a price-to-earnings ratio of about 87, a rich valuation that assumes the AI build-out continues for years. The biggest risk is customer concentration: a handful of customers account for most of the AI business, and each could attempt to design chips in-house or shift spending elsewhere.