Broadcom’s 2028 AI Revenue Target of $230B Outpaces Current Valuation

Key points

• Broadcom expects AI revenue to reach $230 billion by fiscal 2028, doubling from the 2027 target of $115 billion.
• The company’s AI semiconductor revenue grew 221% year-over-year in Q3 2026, reaching $16.7 billion.
• Broadcom trades at a forward P/E of 19x, compared to 25x for NVIDIA, 40x for AMD, and 62x for Marvell.
• Custom AI chips are being developed for hyperscalers including Alphabet, Meta, OpenAI, and Anthropic.
• Supply constraints for wafers and HBM could delay the 2027 revenue ramp, posing a downside risk.

Background

Broadcom reported strong Q3 2026 results on September 2, with revenue of $29.59 billion and adjusted EPS of $3.32, beating estimates. The stock had recently pulled back from its 52-week high of $493.28, sitting approximately 29% lower as of early October. Earlier in 2026, the company had guided for continued acceleration in AI-driven demand, with Q2 revenue rising 48% year-over-year.

How outlets are covering it

The Motley Fool emphasizes that the market has not priced in the 2028 revenue projection, calling the stock a 'screaming buy' due to its low valuation relative to growth. 24/7 Wall St. agrees on the undervaluation, noting that even the bear case price target of $374.67 sits above the current price, but highlights risks from customer concentration and supply limits. Yahoo Finance’s data suggests the stock trades above its average multiple while growth cools, questioning if the premium is fair, though the article text was largely inaccessible due to technical errors.

Why it matters

Broadcom’s long-term guidance signals sustained demand for custom AI chips, challenging the dominance of general-purpose GPUs. If the company meets its 2028 targets, it could significantly reshape the semiconductor market hierarchy and investor expectations for AI infrastructure spending.

What to watch

Investors will watch the December 9 earnings report for Q4 AI revenue, which is guided at $21.70 billion. Supply chain developments and hyperscaler deployment timelines will be critical indicators of whether the 2027 and 2028 revenue targets are achievable.