Broadcom stock is being priced around a custom AI chip business that management believes could top $100 billion by the end of next year. The company’s Q1 results showed how fast that engine is scaling, with the division tied to those chips up 106% year over year to $8.4 billion.
Google TPU And Broadcom
$68 billion in revenue over the past 12 months is the starting point, and custom AI chips are moving from a fraction of that base toward a much larger share. Broadcom and Google have long partnered to design and build Tensor Processing Units, the best-known Broadcom product in this area, and other AI hyperscalers have joined in to build their own chips.
106% growth in Q1 is not coming from a one-off product cycle. Companies are partnering with Broadcom to design application-specific integrated circuits tailored to run a single type of workload, and the company’s custom AI chips are becoming far more important than any other offering under its roof.
Later This Year Through 2027
Later this year, and throughout 2027, a massive wave of clients will have custom chips available. That pipeline gives Broadcom a longer runway than a single quarter of demand, and it explains why the market is treating the custom chip business as the core of the story rather than a side line.
$100 billion by the end of next year would mark a sharp change in Broadcom’s mix, but the comparison with GPUs is the friction point. Nvidia currently dominates AI computing with graphics processing units, while application-specific integrated circuits are presented as a more cost-effective alternative for single-workload use cases.
Stock Advisor And Valuation
986% is the total average return of Stock Advisor, while the S&P 500’s total average return is 207%. The service’s analyst team identified 10 best stocks for investors to buy now and Broadcom was not one of them, leaving investors with a clear split between the company’s operational momentum and one outside ranking of preferred names.
$8.4 billion in Q1 custom AI chip revenue is the figure to watch as Broadcom tries to turn a fast-growing niche into a business larger than many whole-company revenue streams. If the client wave later this year and throughout 2027 lands as planned, the next stage is whether management can keep converting those custom designs into sales fast enough to support the $100 billion target.
