although NVIDIA (NASDAQ: NVDA) Having dominated the position of top artificial intelligence (AI) computing unit supplier for many years, Broadcom (NASDAQ:AVGO) is becoming a force that cannot be ignored. Broadcom’s approach to AI computing is more specialized than Nvidia’s, but that specialized approach is gaining momentum as AI workloads start to become more mature.
While Broadcom has performed well over the past few years, I think it can deliver additional impressive gains over the next two years. If you’re not already a Broadcom shareholder, it’s not too late to buy shares.
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Nvidia makes graphics processing units (GPUs), versatile parallel processors that can handle a variety of computationally heavy workloads. Broadcom makes custom chips called application-specific integrated circuits that are designed in collaboration with its data center customers to run only one type of workload.
Broadcom’s chip customers give up flexibility but gain performance and cost. Its custom AI chips can outperform Nvidia’s GPUs in some applications.
Google’s Tensor Processing Unit (TPU) is a great example of what a properly designed custom AI chip can do. Broadcom and letter The two parties have cooperated for more than ten years to develop, and its cost performance is far better than that of GPU when used to handle AI inference tasks.
Several other AI hyperscale companies are working with Broadcom to develop their own ASICs, and their AI chip revenue is soaring. In the first quarter of fiscal year 2026 (as of February 1), Broadcom’s AI semiconductor revenue reached US$8.4 billion, a year-on-year increase of 106%. This quarter, its AI semiconductor revenue is expected to grow 140% year-on-year to $10.7 billion. That growth far outpaces Nvidia’s growth, but Broadcom won’t stop there.
Broadcom expects its AI chip revenue to reach $100 billion per year by the end of 2027. That doesn’t include its connectivity switches, which are typically included in AI semiconductor revenue totals. So future growth is clearly something for investors to get excited about.
But what will Broadcom’s share price be?
Wall Street’s consensus revenue forecast for Broadcom appears to be consistent with what management is saying. Analysts tracking the company on average expect revenue of about $154 billion in fiscal 2027. This is based on forecasts of 64% revenue growth in fiscal 2026 and 47% revenue growth in fiscal 2027. Over the last 12 months, Broadcom earned earnings per share (EPS) of $5.21. For fiscal 2027, earnings per share are expected to be $17.54.
