Broadcom's AI chip business is moving from a fast-growing slice of the company to the part that could define it. AI chip sales rose 65% to $20 billion in fiscal 2025, and Broadcom expects that figure to reach at least $100 billion in fiscal 2027.
That is why Broadcom Stock is being watched now. The company said AI chips accounted for 31% of its top line in fiscal 2025, and it expects them to make up more than 58% of projected revenue in fiscal 2027. For a chipmaker once better known for other lines of business, that shift points to a company whose growth is increasingly tied to AI demand from major buyers including Google, Meta Platforms, OpenAI and Anthropic.
The math behind the target is stark. Going from $20 billion in fiscal 2025 to at least $100 billion in fiscal 2027 means Broadcom is aiming to add at least $80 billion in annual AI chip sales in two years, or to quintuple that business from the fiscal 2025 base. Analysts expect revenue and EPS to grow at CAGRs of 53% and 66% from fiscal 2025 to fiscal 2028, which helps explain why the market is giving the stock a premium valuation.
Broadcom builds custom application-specific integrated circuits for AI tasks, and that is the core reason its chips can look cheaper at scale than Nvidia's GPUs. Custom ASICs are designed for a narrow set of jobs, so once a customer knows exactly what it needs, Broadcom can tune the chip for that workload instead of paying for the broader flexibility built into general-purpose hardware. The tradeoff is less versatility, but the reward is efficiency when the same job has to be done over and over for huge AI systems.
Even so, the valuation picture is not as simple as the growth story. Broadcom trades at 25 times next year's earnings, while Nvidia trades at 16 times next year's earnings. Broadcom also carries an enterprise value of $1.98 trillion and trades at 16 times next year's adjusted EBITDA, while it still sells non-AI chips for mobile, data center, networking, wireless, storage and industrial applications, along with infrastructure and security software.
That mix matters because Broadcom is not relying on AI chips alone to keep customers close. The company can bundle chips and software across a wider product stack, which gives it more ways to stay embedded with buyers even as its AI business becomes the headline driver. The unanswered question is no longer whether Broadcom has momentum; it is how smoothly it can convert that fiscal 2027 target from a projection into realized sales while holding its place in a market where the biggest AI names still command the most attention.
