The artificial intelligence infrastructure race is accelerating at an unprecedented pace, and Broadcom Inc. (NASDAQ:AVGO) is emerging as a key beneficiary. With hyperscalers like Alphabet Inc. (NASDAQ:GOOGL) (NASDAQ:GOOG), Amazon.com, Inc. (NASDAQ:AMZN), Microsoft Corporation (NASDAQ:MSFT), and Meta Platforms, Inc. (NASDAQ:META) rapidly adopting custom AI chips, Broadcom’s expertise in AI server compute ASICs positions it at the center of this multi-year trend.
According to Counterpoint Research, Broadcom is projected to maintain a 60% market share in AI server compute ASIC design by 2027. This dominance is largely due to the structural shift among tech giants toward in-house AI accelerators optimized for specific workloads. As analyst Neil Shah explains, “In-house AI Server Compute ASIC design growth is validating the in-house custom XPU era, where AI accelerators are tailor-made for special and specific workloads.”
ASIC Shipments Set to Triple
AI server compute ASIC shipments are expected to triple by 2027, driven by the rapid expansion of AI infrastructure. Hyperscalers are deploying massive clusters to support models like Google’s Gemini, Amazon’s Trainium, and Microsoft’s Maia processors. The combination of power and space constraints has made custom silicon solutions increasingly attractive, creating a surge in demand that directly benefits Broadcom.
Beyond AI accelerators, Broadcom offers critical networking components, including Tomahawk switches, digital signal processors, optical components, and PCI Express switches. These products ensure that the growing complexity of AI clusters is supported by high-performance, reliable infrastructure.
Broadcom’s AI Revenue and Backlog
Broadcom’s fiscal 2025 results underscore its AI momentum, with AI-related sales hitting $20 billion, up 65% year-over-year. For fiscal Q1 2026, the company expects AI revenue to exceed $8 billion, reflecting strong order flow. CEO Hock Tan’s compensation incentives are tied to growing AI revenue to over $120 billion by 2030, further aligning management focus with the AI megatrend.
The company currently holds over $73 billion in AI-related backlog, with $53 billion tied specifically to custom accelerators. Broadcom has already secured five major customers for these accelerators, and demand continues to accelerate. The networking segment also benefits, as record orders for the Tomahawk 6 switch—capable of 102 terabits per second—have created a $10 billion backlog.
With a total consolidated backlog of $162 billion, nearly half of it AI-related, Broadcom is exceptionally well-positioned to benefit from the ongoing AI infrastructure buildout, which is expected to accelerate through 2026 and beyond.
How Broadcom Compares to Nvidia
While Nvidia Corporation (NASDAQ:NVDA) dominates the general-purpose GPU market, companies building large language models increasingly rely on application-specific integrated circuits (ASICs) for optimized performance per watt. Broadcom’s focus on custom accelerators gives it a strategic edge, allowing hyperscalers to achieve higher efficiency and tailored compute performance compared to standard GPUs.
This differentiation is crucial as AI clusters scale to hundreds of thousands of processors, making both the compute and networking infrastructure critical to operational success. Broadcom’s engineering expertise allows it to capitalize on this high-growth niche.
AVGO Stock Price Outlook
Broadcom’s market capitalization stands at roughly $1.6 trillion, and AVGO stock has surged 457% over the past three years and 2,388% over the last decade. Analysts expect revenue to grow from $63.9 billion in fiscal 2025 to $236 billion in fiscal 2030, with adjusted earnings expanding from $6.82 to $23.37 per share over the same period.
At a forward price-earnings multiple of 25x—below its current 33x multiple—AVGO stock could trade around $825 by late 2029, implying nearly 150% upside from current levels. Out of 42 analysts covering AVGO, 36 recommend “Strong Buy,” three “Moderate Buy,” and three “Hold”, highlighting broad investor confidence. The average price target is $455.22, above the current price of $333.
Conclusion
Broadcom stock is strategically positioned to benefit from the explosive growth in AI server compute ASICs. With a strong product portfolio, a massive AI backlog, and high demand from hyperscalers, Broadcom stands at the forefront of the AI infrastructure revolution.
Investors looking for exposure to AI megatrends may find AVGO stock particularly compelling due to its growth potential, structural market advantages, and strong analyst support. As hyperscalers continue to expand AI workloads and optimize for efficiency, Broadcom’s role as a leading AI design partner positions it for multi-year growth and shareholder value creation.
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