Broadcom CEO Hock Tan has reiterated guidance for more than $100 billion in AI semiconductor revenue in fiscal 2027, backed by multiyear contracts with Alphabet, Meta Platforms, Anthropic, and OpenAI. Yet the stock trades about 25% below its 52-week high heading into fiscal third-quarter results due Wednesday, Sept. 2.
Broadcom's chief executive has not walked back a $100 billion promise, even though the stock trades far cheaper than when he first made it. On the company's June 3 earnings call, Hock Tan said Broadcom expects about $56 billion of AI semiconductor revenue this fiscal year, up roughly 180% from fiscal 2025, then went further.
Contracts underpin the forecast
According to Fool: "We reiterate our AI semiconductor revenue guidance to be in excess of $100 billion" for fiscal 2027, Tan told analysts on the call. He backed the target with specific commitments: a long-term agreement with Alphabet covering multiple generations of its TPU chips, an arrangement giving Anthropic access to another 5 gigawatts of TPU-based compute starting in 2027, a contractual commitment to deploy 1.3 gigawatts for OpenAI next year, and a Meta Platforms partnership adding 3 gigawatts of custom chips through the end of 2028. Purchase orders totaling $6 billion had also arrived from two additional customers as of the call.
Bookings are running ahead of shipments. Tan said bookings for AI semiconductors topped $30 billion against $10.8 billion shipped in the fiscal second quarter, which ended May 3 and marked a 143% jump from a year earlier.
The same forecast, sold cheaper
Despite that backlog, Broadcom stock trades near $370, about 25% below its 52-week high of $495. At the peak, the stock traded at about 25 times fiscal 2027 adjusted earnings estimates; today it trades at about 19 times those same expected earnings. The company's disclosed AI chip backlog runs near $73 billion, a separate figure from a rival analysis of the same business.
Concentration risk has fresh evidence behind it. Broadcom shares fell about 5% on Aug. 19 after Marvell Technology disclosed an expanded custom-chip agreement with Google, whose TPU chips Broadcom has long designed.
Sept. 2 becomes the checkpoint
Broadcom guided to $16.0 billion of AI revenue for the fiscal third quarter, and management expects about 10 gigawatts of AI compute shipments in fiscal 2027, weighted toward the back half of the year. That timing means the revenue justifying today's forecast arrives late, so a soft quarter or two could look ordinary even if the multiyear plan stays intact. Wednesday's results and the fiscal fourth-quarter guidance will be the first hard checkpoints between June's promises and the $100 billion target for 2027.
Sources: The Motley Fool, The Motley Fool
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