30% Data-Center Capex Surge to Boost Broadcom's AI Networking Growth
Broadcom said data-center capital expenditure is expected to jump about 30% in 2026, driven by AI workloads, boosting demand for its networking switches and custom ASICs. Multiple brokerages upgraded revenue forecasts by an average of 15% for its infrastructure solutions segment to reflect mid-teens organic growth.
1. Data-Center Capex Outlook
Broadcom highlighted that global data-center capital expenditures are forecast to increase by around 30% in 2026, driven primarily by demand for AI-optimized infrastructure. Hyperscale cloud operators and enterprise customers are expected to invest heavily in new servers and networking equipment to support generative AI workloads.
2. Brokerage Revenue Forecast Upgrades
Following the capex outlook, multiple brokerages raised Broadcom's revenue forecasts for its infrastructure solutions segment by an average of 15%, reflecting anticipated mid-teens organic growth. Analysts cited stronger orders for its networking ASICs and custom switches as key drivers of the upgraded guidance.
3. Segment Impact Analysis
The networking switches and custom ASIC businesses are set to benefit most from the spending surge, as Broadcom supplies high-bandwidth silicon essential for AI data centers. Management indicated that these segments could drive double-digit profit margin expansion over the coming year.