Broadcom Guide to Double Fiscal 2027 AI Revenue is Conservative, Truist Says

11:39 AM EDT, 09/03/2026 (MT Newswires) -- Broadcom's (AVGO) guidance that its artificial intelligence revenue will double in fiscal 2027 was slightly below Wall Street's consensus but the company is likely to "handily" top the projection, Truist Securities said in a note emailed Thursday. Late Wednesday, the chipmaker reported a fiscal third-quarter beat amid a surge in AI semiconductor sales and projected that revenue in the ongoing quarter will top Street's views. "In 2027, we have secured the supply to again double AI revenue to approximately $115 billion. Our demand actually exceeds this outlook and we will work to improve supply," Chief Executive Hock Tan said on an earnings conference call, according to a FactSet transcript. "We have line of sight for fiscal 2028 AI semiconductor revenue growth to again double to $230 billion." "We believe demand far exceeds this outlook but is constrained by land/power/shell, and memory," William Stein a Truist managing director said in a note to clients. Analysts expect fiscal 2027 and 2028 AI revenue of $123 billion and $177 billion, according to the note. Truist expects Broadcom to beat the guidance while citing pre-payments for materials and take-or-pay agreements as key factors supporting the reliability of the outlook. Broadcom's model points to a stronger growth trajectory over the next two years, while the scale of gigawatt data center deployments makes the guidance easily achievable, Stein said. The brokerage reduced its price target on Broadcom's stock to $520 from $550 and reiterated buy rating. Truist also lowered calendar year 2027 earnings per share estimate to $21.12 from $22.35. Every gigawatt of compute deployed by Anthropic and OpenAI can generate $30 billion in annual recurring revenue, making it a "great" investment, Tan said. "Considering build costs of ($40 billion to $50 billion per gigawatt), the implication is that inference is hugely profitable for frontier labs, which leads them to continue to invest aggressively in training infrastructure," Stein wrote. "We view this as very constructive for the whole AI complex." Broadcom stock was down 5.4% Thursday morning and is 0.4% higher year-to-date. Rising data center demand is driving strong results, with Nvidia (NVDA) and chip designer Marvell Technology (MRVL) reporting quarterly revenue beats last month. Previously, chipmaker Advanced Micro Devices (AMD) posted fiscal second-quarter results above estimates and issued a strong third-quarter revenue outlook. Price: 346.66, Change: -20.58, Percent Change: -5.60