News 61
Broadcom (AVGO) announced significant growth projections in AI semiconductors during its earnings call. The company forecasts $230 billion in AI semiconductor revenue by 2028, a substantial increase from its current trailing 12-month revenue of under $90 billion. This growth is expected to come from specialized AI chips designed for specific workloads, partnering with major AI hyperscalers such as Alphabet (Google), Meta Platforms, OpenAI, and Anthropic.
Broadcom’s client list includes Alphabet’s Tensor Processing Units (TPUs), with demand projected to rise in 2028 and 2029. For 2023, AI semiconductor revenue is expected to be $58 billion, increasing to $115 billion in 2024 and reaching $230 billion in 2028. The company has secured a robust supply chain, reducing execution risk.
Broadcom’s total revenue is projected to exceed $288 billion by 2028, combining AI semiconductor revenue with $58 billion from core business units, which are expected to grow at a 10% rate. This shift is also boosting Broadcom’s profit margins, potentially rising by 50% by 2028. If these projections hold, Broadcom’s market cap could reach $4.3 trillion, valuing the stock at over $900 per share—a nearly threefold increase from its current $358 price.
The company’s margins are improving due to higher profitability from custom AI chips, making it a compelling investment opportunity for AI-focused investors.
Source: The Motley Fool
