Broadcom's Stock Fell 25% Despite $100B AI Forecast

Broadcom CEO Hock Tan put a specific number on the company's AI future months ago, and he hasn't walked it back despite the stock's substantial decline since. On the company's June 3 earnings call, Tan reiterated that Broadcom expects AI semiconductor revenue to exceed $100 billion in fiscal 2027, yet the stock now trades around $370, roughly 25% below its 52-week high of $495, according to The Motley Fool's reporting on the divergence.

The underlying business results support Tan's confidence, at least so far. Broadcom's AI semiconductor revenue reached $10.8 billion in fiscal second-quarter 2026, up 143% from a year earlier, with guidance calling for $16.0 billion in the third quarter, according to The Motley Fool's reporting. For context on the scale of the fiscal 2027 target, Broadcom's total revenue across the past 12 months, including its enterprise software business, was only about $75 billion, meaning the company's own AI chip forecast alone would exceed its current total company revenue.

Broadcom's AI Revenue Trajectory

Tan has been explicit that the $100 billion target rests on concrete, disclosed customer commitments rather than aspirational projection. According to The Globe and Mail's reporting on the earnings call, six core custom-chip customers drive nearly all of that projected revenue, including Google, Meta, Anthropic, and OpenAI. Tan detailed specific commitments for each: a long-term agreement with Alphabet covering multiple generations of its TPU chips, an arrangement giving Anthropic access to additional gigawatts of custom compute capacity, with demand from Anthropic alone expected to "surge in excess of 3 gigawatts" in 2027, and OpenAI, Broadcom's sixth and newest major customer, expected to deploy its first-generation custom chip at more than 1 gigawatt of compute capacity that same year, according to TIKR's detailed breakdown of the customer commitments.

Tan also pushed back directly on analyst skepticism about one specific relationship: "Contrary to recent analyst reports, Meta's custom accelerator MTIA road map is alive and well," he told analysts, according to TIKR's reporting.

Despite that customer-backed confidence, the stock's decline reflects genuine market anxiety about concentration risk. Nearly all of Broadcom's projected $100 billion in AI revenue depends on just six customers, a dependency structure that leaves the forecast vulnerable if even one or two of those hyperscalers meaningfully slow their custom chip deployment plans. That concentration risk connects directly to the broader AI infrastructure spending scrutiny we've tracked closely this month, including the ECB's warning that current AI-driven valuations are likely due for a correction and ongoing questions about whether AI capital expenditure levels across the industry are sustainable.

Broadcom's situation is worth understanding for any business evaluating AI infrastructure vendors or investing in AI-adjacent public companies, since it illustrates a broader pattern playing out across AI infrastructure stocks this earnings season: genuinely strong, verifiable growth numbers aren't automatically translating into rising valuations, as investors increasingly demand clarity on customer concentration and long-term demand durability, not just headline growth rates.

For businesses relying on custom AI chip supply from Broadcom, whether directly or through cloud providers using Broadcom-designed silicon, this customer concentration is worth understanding as a genuine supply chain risk factor, since the health of Broadcom's business is closely tied to the continued AI infrastructure spending decisions of a small handful of hyperscalers.

How much AI revenue does Broadcom expect in fiscal 2027?
Broadcom CEO Hock Tan has reiterated that the company expects AI semiconductor revenue to exceed $100 billion in fiscal 2027, up from an expected $56 billion in fiscal 2026.

Why has Broadcom's stock fallen despite strong AI growth?
Broadcom's stock is down roughly 25% from its 52-week high, reflecting investor concern about customer concentration risk, since nearly all of the company's projected AI revenue depends on just six major customers including Google, Meta, Anthropic, and OpenAI.

Which companies are Broadcom's main AI chip customers?
Broadcom's six core custom-chip customers include Google, Meta, Anthropic, and OpenAI, with Google using Broadcom-designed TPU chips and Anthropic and OpenAI both deploying custom accelerators expected to scale significantly by 2027.

Broadcom CEO Hock Tan has repeatedly reaffirmed the company's forecast of more than $100 billion in AI semiconductor revenue for fiscal 2027, even as the stock trades roughly 25% below its 52-week high. The forecast rests on concrete customer commitments from six major hyperscalers, including Google, Meta, Anthropic, and OpenAI, with AI revenue already up 143% year over year in the most recent quarter. The stock's decline despite this strong growth reflects genuine investor anxiety about customer concentration risk, since nearly all of Broadcom's projected AI revenue depends on continued spending from a small handful of major AI labs and hyperscalers.