While everyone's been obsessing over Nvidia, Hock Tan just made a case that Broadcom might be the smarter AI play. The company reported earnings Wednesday that should make any investor paying attention sit up straight.
The headline: AI revenue doubled year-over-year to $8.4 billion, and CEO Tan said on the earnings call that Broadcom has "line of sight to achieve AI revenue from chips, just chips, in excess of $100 billion in 2027." That's not a typo. $100 billion. In two years.
Here's what makes Broadcom different, and why you should care: they're not competing with Nvidia in the GPU arms race. Instead, they're designing custom AI accelerators for the companies actually building AI products—Amazon, Google, Meta, and OpenAI. Think of it as selling shovels to gold miners, except the shovels are bespoke and the miners are Big Tech.
Tan laid out some eye-opening details on the earnings call. Anthropic, the AI startup everyone's been watching, placed a $10 billion custom chip order. OpenAI is deploying over one gigawatt of custom chips in 2027. Even Meta's MTIA custom accelerator program—which analysts have been questioning—is "alive and well," according to Tan, targeting multiple gigawatts of capacity.
Let me translate the business model: When Amazon or Meta wants custom AI chips designed, fabricated, and packaged, they come to Broadcom. Broadcom provides the intellectual property and backend technologies, sends the designs to chip fabs like TSMC, then handles the advanced packaging. It's a toll booth on the AI highway, and the toll keeps getting bigger.
The numbers back it up. Revenue jumped 29% year-over-year to $19.31 billion. For the current quarter, Broadcom guided to $22 billion in revenue—significantly above the $20.56 billion analysts expected. The stock jumped , and frankly, that feels conservative given what outlined.
