Broadcom’s AI Revenue Forecast Soars to $120 Billion on Back of Major Partnerships

A Mizuho Securities analysis has dramatically raised the bar for Broadcom’s artificial intelligence business. Following meetings with CEO Hock Tan and other executives, the investment bank now projects the company’s AI revenue will reach approximately $120 billion by 2027. This bullish revision, up from a consensus estimate of $100 billion at the start of the year, underscores the semiconductor giant’s accelerating momentum. Analyst Vijay Rakesh maintained his $480 price target and “Outperform” rating on the stock.

This confidence is built on a foundation of concrete, multi-year agreements with the world’s leading tech firms. In a flurry of activity throughout April, Broadcom secured its position as a premier supplier of custom AI silicon. The month concluded with a landmark deal announced on April 14th with Meta, extending their strategic partnership through 2029. This collaboration will see Broadcom design, package, and network Meta’s next-generation MTIA chips, which are set to be the first AI chips ever produced using a cutting-edge 2-nanometer process. The initial deployment phase starts at over one gigawatt of capacity, with plans to scale to a multi-gigawatt rollout.

These partnerships are part of a systematic strategy. Broadcom now serves six major “XPU” clients, including Alphabet, Meta, ByteDance, Fujitsu, and OpenAI. The company is contractually bound to design future versions of Google’s Tensor Processing Units through at least 2031. OpenAI has also entered a ten-year agreement for ten gigawatts of capacity through 2029.

Recent financial results provide tangible evidence supporting the optimistic forecasts. For the first quarter of fiscal 2026, Broadcom’s AI revenue doubled to $8.4 billion, contributing to a 29% jump in total revenue to $19.3 billion. Management guidance for the current second quarter points to AI revenue of $10.7 billion, representing a staggering 140% increase year-over-year.

Should investors sell immediately? Or is it worth buying Broadcom?

The stock has been a standout performer, more than doubling in value over the past year and currently trading just 4% below its 52-week high. With a gain of nearly 15% year-to-date, it has significantly outpaced the broader market. Technical indicators, however, show the equity is overbought, with a Relative Strength Index reading of 74. The current share price stands roughly 129% above its 52-week low, marking one of the sector’s most powerful recoveries.

Broadcom’s annual shareholder meeting is scheduled for Monday. Key agenda items include the election of eight directors, the ratification of PricewaterhouseCoopers as independent auditor, and a vote on executive compensation. CEO Hock Tan’s pay package is heavily weighted toward performance-based stock units, structured to incentivize his leadership through fiscal 2030. Notably, the Meta partnership has prompted a governance change: Tan will step down from Meta’s board at its next annual meeting, transitioning to an advisory role focused specifically on custom chip strategy to avoid potential conflicts of interest.

All eyes are now on the upcoming quarterly report due on June 4th. Analysts anticipate earnings per share of $2.39 on revenue of approximately $22 billion. Sentiment is overwhelmingly positive, with 28 analysts covering the stock issuing a consensus “Strong Buy” recommendation and an average price target of $438. Individual targets from major firms are even higher, including $500 from JPMorgan and $470 from Morgan Stanley. The results will reveal if the company hits its ambitious Q2 AI revenue target, setting the stage for incoming CFO Amie Thuener, who assumes her role on June 12th.