Broadcom sees AI chip revenue near $230 billion by fiscal 2028

Broadcom's position differs from Nvidia's in a way that shapes its outlook: it builds customized AI accelerators (XPUs) for hyperscalers rather than general-purpose GPUs. The company says these XPUs can process AI inference tasks faster and more efficiently than Nvidia's stand-alone GPUs when deployed at scale.

The revenue trajectory is steep. After AI chip sales reached $20 billion in fiscal 2025, Broadcom expects $58 billion in fiscal 2026, $115 billion in 2027, and $230 billion in fiscal 2028. If it hits those targets, analysts expect revenue and EPS to grow at CAGRs of 62% and 78%, respectively, from fiscal 2025 to fiscal 2028.

Broadcom is also bundling other products -- Ethernet switch chips, optical interconnect components, and infrastructure software -- with its XPUs, which it says gives it pricing power and a wider defensive moat. Its infrastructure software business, built on converting VMware to subscriptions after the late-2023 acquisition, accounted for 30% of revenue in the latest quarter. But the company notes that software growth probably cannot offset an abrupt slowdown in AI chips, leaving the stock's bargain valuation dependent on whether AI spending holds up.