Broadcom CEO sees chip sales crossing $100 billion in 2027; Stock jumps

Broadcom CEO Hock Tan believes that the company could achieve chip sales worth $100 billion in 2027 and has also secured the supply chain required to achieve that landmark. Tan made these remarks in the company’s post-earnings call. The stock jumped 6% in extended trading.Even as Nvidia remains the biggest manufacturer of accelerators, or chips that help train and run AI models, Broadcom is positioning itself as an alternative with its own custom-made semiconductors.

Broadcom’s guidance surpassed most analyst expectations for the ongoing quarter. Revenue guidance of $22 billion was higher than the average estimate of $20.5 billion, even as some projections were higher than that figure. The company also announced a share buyback plan of as much as $10 billion, further boosting the surge in the stock price in extended trading.
Both OpenAI and Anthropic are Broadcom’s clients and the company also developed a TPU or Tensor Processing Unit for Google. The company has also shipped the first units of a new generation of processors which will be adopted by more clients this year.For the current quarter, Broadcom’s revenue and Earnings per Share (EPS), were both in-line with expectations.

CEO Tan said on the conference call that he expects OpenAI to begin shipping its Broadcom chip in volume next year, reaching more than 1 gigawatt of computing capacity.

Shares of Broadcom traded 4.5% higher in extended trading on Wednesday. The company’s shares, as of close in regular trading, were down 8% year-to-date.