Within its latest earnings report on March 4, semiconductor giant Broadcom (NASDAQ: AVGO) provided markets with many positive pieces of news. The firm beat estimates on sales and adjusted earnings per share and announced significantly better-than-expected guidance for the next quarter. The company reneged on past statements regarding gross margin deterioration and added a sixth buyer to its custom artificial intelligence (AI) processor lineup.
Additionally, the firm said that its visibility into 2027 had “dramatically improved." CEO Hock Tan said, “We have line of sight to achieve AI revenue … in excess of $100 billion in 2027." Next quarter, Broadcom expects to generate $10.7 billion in AI revenue, which would translate to an annual run rate of $42.8 billion. Thus, achieving more than $100 billion in AI revenue in 2027 would clearly require large, continued growth in Broadcom’s AI business.
