Key Indicators for Broadcom and Nvidia Investors Ahead of June 3 Earnings Report

Key Points

• Broadcom is expanding its artificial intelligence (AI) chip business, focusing on custom chips for key customers.

• CEO Hock Tan has set an ambitious target of $100 billion in AI chip revenue by fiscal 2027.

• Broadcom anticipates that AI networking will contribute 40% to its total AI revenue in the upcoming quarter.

Broadcom (NASDAQ: AVGO) is enhancing its custom AI chip offerings, primarily through partnerships with major companies like Google and Meta Platforms. The company’s AI chip revenue target for 2027 is $100 billion, a significant increase from the $8.4 billion earned in the first quarter of fiscal 2026. During the second quarter, Broadcom expects AI chips to generate approximately $6.4 billion in revenue, while AI networking will account for around $4.3 billion.

As part of its strategy, Broadcom’s custom chips focus on high-volume workloads, competing partially with Nvidia GPUs. In recent developments, Broadcom has extended collaborations for developing Tensor Processing Units (TPUs) with Google and AI accelerator chips with Meta. Investors should closely monitor Broadcom’s progress toward achieving its revenue targets and the implications for its market position against competitors like Nvidia.