Broadcom beats Q3 estimates and forecasts AI semiconductor sales to quadruple within two years

Broadcom turned in third-quarter results that beat market expectations, powered by demand for AI semiconductors, and laid out a forecast calling for roughly quadrupling AI chip sales within two years, according to South Korea's Maeil Business Newspaper. Analysts cited in the report say that after Google, Anthropic and OpenAI are speeding up in-house AI chip development, rapidly expanding Broadcom's position in an AI semiconductor market long dominated by Nvidia.

On the numbers, third-quarter revenue rose 86% year over year to $29.59 billion, above the $29.36 billion analysts expected. Net income came in at $13.09 billion, more than triple the $4.14 billion a year earlier, and earnings per share of $3.32 topped the $3.24 consensus. AI semiconductors drove the growth, with quarterly revenue of $16.7 billion exceeding market forecasts.

For the near term, Broadcom guided fourth-quarter AI semiconductor revenue to $21.7 billion, while its total fourth-quarter revenue guidance of $34.8 billion came in slightly below the roughly $35 billion market consensus.

The long-term outlook is far more aggressive. CEO Hock Tan said on the post-earnings call that AI semiconductor sales should rise to about $115 billion in fiscal 2027, double, then double again to $230 billion in fiscal 2028. He added that the company has six customers, four of which will be very large, and that demand currently exceeds supply capacity.

Anthropic and OpenAI sit at the center of that growth. Broadcom expects to supply Anthropic with AI chips at roughly 5GW scale in 2027 and an additional 10GW in 2028. Anthropic is expected to surpass Google as Broadcom's largest custom AI chip customer next year. The OpenAI partnership is also scaling quickly: the co-developed Jalapeño AI accelerator is slated to reach about 1.3GW in 2027, with first- and second-generation chips together exceeding 5GW by 2028, and OpenAI is close to finishing its second-generation chip design while preparing a third-generation product with Broadcom.

Google and Meta remain core customers. Broadcom plans to supply Google with custom processors worth tens of billions of dollars annually for the coming years, and to deliver Meta a third-generation custom chip by the end of 2027 along with volume production of Meta's own MTIA accelerator for AI inference and recommendation workloads.

The report frames the custom-chip push as big AI companies trying to reduce dependence on Nvidia GPUs and improve cost and power efficiency, a market Broadcom captures by designing chips to customer specifications and organizing production. Tan claimed that the latest chip co-developed with Google performs equal to or better than Nvidia's next-generation Vera Rubin when running AI models.

What to watch: whether the 5GW Anthropic deliveries land on schedule in 2027, how quickly OpenAI's Jalapeño scales, and whether Google keeps expanding its orders. If the $230 billion target materializes, Broadcom becomes the most important AI compute supplier outside Nvidia, and the clearest signal yet that frontier labs want their own silicon.