Broadcom has raised its forecast for AI chip sales, signaling continued heavy spending on artificial intelligence infrastructure by major technology companies.

The company now expects its AI chip revenue to reach $115 billion by October 2027, and projects that figure to double to $230 billion in fiscal 2028, according to its latest guidance.

The outlook comes even as Broadcom's shares slipped about 1%, despite the company beating Wall Street's estimates for third-quarter revenue. The muted stock reaction reflects how elevated investor expectations have become around AI chip suppliers after a run of strong results across the sector, with any hint of slower growth drawing scrutiny even when headline numbers top estimates.

Broadcom, led by longtime CEO Hock Tan, is a major designer and supplier of custom AI chips and networking hardware. The company has become one of the key beneficiaries of the AI infrastructure buildout, as large technology firms increasingly develop custom accelerators alongside GPUs from suppliers such as Nvidia, and as AI developers including OpenAI drive demand for dedicated computing capacity. Custom chips, often called ASICs, are attractive to large cloud operators because they can be tailored to specific workloads and offer greater control over cost and supply compared with general-purpose GPUs, a shift that has positioned Broadcom alongside Nvidia as a central player in AI computing.

The scale of the forecast also points to sustained, multi-year capital commitments from hyperscale technology firms, whose data center budgets have increasingly flowed toward dedicated AI silicon. How that spending pace holds up as AI developers seek returns on their infrastructure investments will be a key factor to watch in Broadcom's upcoming quarterly reports.

Source: CNBC-TV18