Broadcom expects its AI semiconductor revenue to reach $230 billion in 2028, up from a projected $58 billion this year, as custom AI chips built for Alphabet, Meta, OpenAI and Anthropic take a growing share of its business. A Motley Fool analysis argues that guidance, paired with rising margins, could push Broadcom shares above $900 by the end of 2028.
Broadcom expects about $230 billion in AI semiconductor revenue during 2028, the company said on its latest earnings call. Broadcom's trailing 12-month revenue currently totals less than $90 billion, so the forecast implies its total revenue will more than triple by the end of 2028.
Custom chips replace general-purpose GPUs
Broadcom builds application-specific integrated circuits, or ASICs, tailored to a single AI workload rather than general-purpose graphics processing units. Many GPUs handle only one type of workload over their service life, and a chip designed solely around that function can perform similarly or better at a lower cost.
Broadcom's client list is headed by Alphabet, Meta Platforms, OpenAI and Anthropic. Alphabet's Tensor Processing Units are the most produced AI chips Broadcom designs, and Broadcom said it expects demand for the latest TPU generation to keep growing in 2028 and 2029.
AI chip revenue set to nearly quadruple
Broadcom projects $58 billion in AI semiconductor revenue this year, rising to $115 billion next year and $230 billion in 2028. The company says it has already secured the supply chain needed to support that growth, which lowers the execution risk behind the forecast.
A $900 price target rests on margin assumptions
Wall Street analysts estimate Broadcom's total sales this year at $106 billion, which puts its non-AI core businesses at roughly $48 billion. Motley Fool contributor Keithen Drury projects that core business growing 10% a year to reach $58 billion by 2028, as AI chips, which carry higher profit margins than Broadcom's other products, become a larger share of sales. He estimates Broadcom's overall profit margin could rise to about 50% over the same period.
Combining the $230 billion AI forecast with $58 billion from core businesses would give Broadcom $288 billion in total 2028 revenue. At a 50% margin, that equals $144 billion in profit. Applying a 30-times-earnings multiple would value Broadcom at a $4.3 trillion market cap. Broadcom's market cap today is $1.7 trillion at a $358 per-share price.
Reaching a $4.3 trillion valuation would require Broadcom's stock to trade above $900 per share. That figure rests on Drury's own margin and valuation assumptions rather than on Broadcom's own guidance.
Source: The Motley Fool
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