Broadcom raises AI chip forecast as Big Tech keeps writing bigger checks

AI chip sales more than tripled to $16.7 billion in the third quarter, lifting Broadcom's total revenue to $29.59 billion, which beat estimates of $29.36 billion. Adjusted profit came in at $3.32 per share, compared with estimates of $3.24.

The outlook highlights how AI spending is broadening beyond Nvidia's NVDA.O costly processors, benefiting suppliers such as Broadcom that provide both custom chips and the networking components that tie AI systems together. As Big Tech races to build AI infrastructure, bookings for Broadcom's AI chips topped $30 billion last quarter alone.

CEO Hock Tan told analysts Broadcom has secured enough supply to support the higher forecast for next year, while customer demand continues to mount. He said the company has visibility into additional AI infrastructure deployments through 2028, including more than 10 gigawatts for Anthropic, over 5 GW for OpenAI and 3 GW for Meta.

"That is committed capacity, not aspiration, and it closes most of the gap to what the market wanted," said Patrick Moorhead, CEO of analyst firm Moor Insights & Strategy.