Broadcom delivered a blowout quarter and guided next quarter's revenue up 47% YoY, driven by explosive AI semiconductor demand. Management provided unprecedented visibility, guided by explicit customer commitments, with AI chip revenue expected to exceed $100B in FY2027. They countered bearish narratives on Meta's MTIA program and OpenAI's custom silicon ambitions, while emphasizing their strategic, multi-year partnerships and secured supply chain. Q1 FY2026 revenue was $19.3B, up 29% YoY, beating guidance on the back of AI semiconductor strength.
Broadcom delivered a blowout quarter and guided next quarter's revenue up 47% YoY, driven by explosive AI semiconductor demand. Management provided unprecedented visibility, guided by explicit customer commitments, with AI chip revenue expected to exceed $100B in FY2027. They countered bearish narratives on Meta's MTIA program and OpenAI's custom silicon ambitions, while emphasizing their strategic, multi-year partnerships and secured supply chain. Q1 FY2026 revenue was $19.3B, up 29% YoY, beating guidance on the back of AI semiconductor strength.
Management said AI demand is accelerating sharply, with custom XPU deployments across six customers and AI networking growing. They now have line of sight to exceed $100B in AI chip revenue in 2027 and framed custom XPU programs as strategic, multi-year engagements rather than…
Management said AI demand is accelerating sharply, with custom XPU deployments across six customers and AI networking growing. They now have line of sight to exceed $100B in AI chip revenue in 2027 and framed custom XPU programs as strategic, multi-year engagements rather than…
Management said AI demand is accelerating sharply, with custom XPU deployments across six customers and AI networking growing. They now have line of sight to exceed $100B in AI chip revenue in 2027 and framed custom XPU programs as strategic, multi-year engagements rather than…
Management gave a landmark FY2027 outlook, with line of sight to over $100B in AI chip revenue alone.
Management said AI demand is accelerating sharply, with custom XPU deployments across six customers and AI networking growing. They now have line of sight to exceed $100B in AI chip revenue in 2027 and framed custom XPU programs as strategic, multi-year engagements rather than optionality.
Broadcom's guidance is aggressively positive, with AI chip revenue expected to exceed $100B in 2027, driven by custom XPU deployments and secure supply chain capacity.
Capex/capacity emphasis is on securing external supply rather than heavy internal capex: management has locked up leading-edge wafers, HBM, and substrates through 2028 and built inventory to support accelerating AI shipments.
Management repeatedly raised guidance, highlighted dramatic visibility into 2027, and dismissed competitive threats from customer-owned tooling.
“they will start to develop two chips each year simultaneously. One for training, one for inference to be specialized.”
“we expect as a composition of our total AI revenue in any quarter, that we'll be ranging between probably 33% to 40% AI networking components.”
“you don't need to go run into some bright shiny objects called CPO even as we are the lead in CPOs. CPOs will come in its time, not this year, maybe not next year, but in its time.”
| Metric | Period | Range | Midpoint | Status |
|---|---|---|---|---|
| RevenueAI | FY2027 | $100B | $100B | GUIDED |
| Revenue | FY2026 Q2 | $22B | $22B | GUIDED |
| RevenueSEMICONDUCTOR | FY2026 Q2 | $14.8B | $14.8B | GUIDED |
| RevenueAI | FY2026 Q2 | $10.7B | $10.7B | GUIDED |
| Issued | Metric | Target | Guide | Actual | Outcome |
|---|---|---|---|---|---|
| FY2026 Q2 | Gross margin | FY2026 Q3 | 74% | 69.13% | Missed |
| FY2026 Q2 | Op margin | FY2026 Q3 | 67% | 53.92% | Missed |
| FY2026 Q2 | Revenue | FY2026 Q3 | $16B | $16.7B | Met / beat |
| FY2026 Q2 | Revenue | FY2026 Q3 | $8.9B | $8.8B | Met / beat |
| FY2026 Q2 | Revenue | FY2026 Q3 | $29.4B | $29.591B | Met / beat |
| FY2026 Q2 | Revenue | FY2026 Q3 | $20.5B | $20.8B | Met / beat |
| FY2025 Q4 | Gross margin | FY2026 Q1 | 77% | 65.57% | Missed |
| FY2025 Q4 | Op margin | FY2026 Q1 | 67% | 44.95% | Missed |
| FY2025 Q4 | Revenue | FY2026 Q1 | $19.1B | $19.311B | Met / beat |
Anthropic's custom TPU demand with Broadcom is scaling dramatically, surging from 1GW in 2026 to over 3GW in 2027, signaling massive compute capacity expansion.
“For Entropic, we are off to a very good start in 2026 for one gigawatt of TPU compute. And for 2027, this demand is expected to surge in excess of three gigawatts of compute.”
… 140% year-on-year to $10.7 billion. Now, our custom accelerator business grew 140% year-on-year in Q1. This momentum continues in Q2. The RAM of custom AI accelerators across all our five customers is progressing very well. For Google, we continue our trajectory of growth in 26 with strong demand for the seventh generation Ironwood TPU. In 2027 and beyond, we expect to see even stronger demand from next generations of TPU. For Entropic, we are off to a very good start in 2026 for one gigawatt of TPU compute. And for 2027, this demand is expected to surge in excess of three gigawatts of compute. Our XPU franchise, I should add, extends beyond TPUs. Now, contrary to recent analyst reports, Meta's custom accelerator MTIA roadmap is alive and well. We're shipping now. And in fact, for the next generation XPUs, we will scale to multiple gigawatts in 27 and beyond. Rounding off for customers four and five. We see strong shipments this year and which we expect to more than double in 2027. We also now have a sixth customer. We expect OpenAI to deploy in volume their first generation XPU in 2027 and over one gigawatt of compute capacity. Let me take a second to emphasize our …
Google's demand for Broadcom's custom TPUs remains strong, with growth expected to continue through 2027 and beyond with next-generation TPUs.
“For Google, we continue our trajectory of growth in 26 with strong demand for the seventh generation Ironwood TPU. In 2027 and beyond, we expect to see even stronger demand from next generations of TPU.”
… outlook. In Q2, this momentum accelerated and we expect semiconductor revenue to be $14.8 billion, up 76% year-on-year. Driving this is AI revenue growth, which will accelerate very sharply to 140% year-on-year to $10.7 billion. Now, our custom accelerator business grew 140% year-on-year in Q1. This momentum continues in Q2. The RAM of custom AI accelerators across all our five customers is progressing very well. For Google, we continue our trajectory of growth in 26 with strong demand for the seventh generation Ironwood TPU. In 2027 and beyond, we expect to see even stronger demand from next generations of TPU. For Entropic, we are off to a very good start in 2026 for one gigawatt of TPU compute. And for 2027, this demand is expected to surge in excess of three gigawatts of compute. Our XPU franchise, I should add, extends beyond TPUs. Now, contrary to recent analyst reports, Meta's custom accelerator MTIA roadmap is alive and well. We're shipping now. And in fact, for the next generation XPUs, we will scale to multiple gigawatts in 27 and beyond. Rounding off for customers four and five. We see strong shipments this year and which we expect to more than double in 2027. We also …
Broadcom is refuting rumors of Meta's MTIA program being canceled, confirming active shipments and strong scaling to multiple gigawatts in 2027 and beyond.
“Now, contrary to recent analyst reports, Meta's custom accelerator MTIA roadmap is alive and well. We're shipping now. And in fact, for the next generation XPUs, we will scale to multiple gigawatts in 27 and beyond.”
… our trajectory of growth in 26 with strong demand for the seventh generation Ironwood TPU. In 2027 and beyond, we expect to see even stronger demand from next generations of TPU. For Entropic, we are off to a very good start in 2026 for one gigawatt of TPU compute. And for 2027, this demand is expected to surge in excess of three gigawatts of compute. Our XPU franchise, I should add, extends beyond TPUs. Now, contrary to recent analyst reports, Meta's custom accelerator MTIA roadmap is alive and well. We're shipping now. And in fact, for the next generation XPUs, we will scale to multiple gigawatts in 27 and beyond. Rounding off for customers four and five. We see strong shipments this year and which we expect to more than double in 2027. We also now have a sixth customer. We expect OpenAI to deploy in volume their first generation XPU in 2027 and over one gigawatt of compute capacity. Let me take a second to emphasize our collaboration with these six customers to develop AIXPUs is deep, strategic, and multi-year. We bring to the partnerships, each of them unmatched technology in service, silicon design, process technology, advanced packaging, and networking to enable each of …
OpenAI is a new, sixth customer for Broadcom's custom XPUs, expected to deploy over 1GW of compute capacity in 2027, further validating Broadcom's custom silicon strategy.
“We also now have a sixth customer. We expect OpenAI to deploy in volume their first generation XPU in 2027 and over one gigawatt of compute capacity.”
… in excess of three gigawatts of compute. Our XPU franchise, I should add, extends beyond TPUs. Now, contrary to recent analyst reports, Meta's custom accelerator MTIA roadmap is alive and well. We're shipping now. And in fact, for the next generation XPUs, we will scale to multiple gigawatts in 27 and beyond. Rounding off for customers four and five. We see strong shipments this year and which we expect to more than double in 2027. We also now have a sixth customer. We expect OpenAI to deploy in volume their first generation XPU in 2027 and over one gigawatt of compute capacity. Let me take a second to emphasize our collaboration with these six customers to develop AIXPUs is deep, strategic, and multi-year. We bring to the partnerships, each of them unmatched technology in service, silicon design, process technology, advanced packaging, and networking to enable each of these customers to achieve optimal performance for their differentiated LLM workloads. We have the track record to deliver these XPUs at high volumes at an accelerated time to market with very high yields. And beyond technology, we provide multi-year supply agreements as our customers scale up deployment of …
Broadcom's custom XPU deployments are shifting from single-purpose training to specialized, disaggregated architectures with separate chips for training and inference, driving a need for more silicon per customer. — This signifies a strategic shift away from Nvidia's general-purpose GPUs, as hyperscalers and LLM developers demand increasingly specialized silicon to improve efficiency and performance.
Good afternoon. Thanks for taking my question. Hawk, it was helpful to hear you discuss the progress of your other full custom XPU engagements outside of TPUs. As we look into next year, is it fair to assume that those are mostly targeting inference applications or not? And then could you maybe qualitatively speak to either the performance or cost advantages relative to GPUs that is giving those customers the ability to forecast in such a large scale? Thank you.
Thanks. It's, you know, most of our customers begin with inference simply because that tends to be, you know, that tends to be the, Easiest path to start on not necessarily from anything else than the fact that You know when you do inference It's much it's less compute, but also then the question is do you need this general-purpose? Massive dense matrix multiplication GPUs when you can do it more efficiently effectively with customs inference silicon XP use that do the job better or just as well much cheaper cost lower power and that's what we find this customer starting with but they are now in training and many of our xpus are used both in training as well as inference and by the way they are interchangeable just a gpu can be used not just for training which they are perhaps more perfectly suited to but they can be used for inference What we're seeing is our XPUs are used for both. And we're seeing that going on. But we're also seeing very rapidly for those customers who are much more matured in the progression I talked about in their journey towards complete XPU, that they will start to develop two chips each year simultaneously. One for training, one for inference to be specialized. Why? Because what we're seeing very clearly for these LLM players is you do the training to achieve a higher level of intelligence, smarts for your LLM. So great, you get yourself a great LLM state of the art or more. Now you've got to productize it, which means inference. Well, you can't then decide at that time you got your model going as the best. Because if you decide then to do your inference productization, it'll take you a year at least to productize at which time somebody else is going to create an LLM better than yours. So you, that's a leap of faith here that when you do training to create the next level of super intelligence in your LLM, you have to be investing simultaneously in inference, both in terms of the chip, and the capacity. So our visibility is really coming out better and better as we find those six customers get more matured in their progression towards better and better LLMs. So yeah, that is the trend we are seeing. It's not happening to all our six customers yet, but we are seeing A majority of them headed in that way right now.
Broadcom is guiding for direct attach copper (DAC) to remain the primary scale-up interconnect through 400G, delaying the adoption of co-packaged optics (CPO) despite being a leader in the technology. — This indicates a slower-than-expected adoption timeline for CPO, potentially impacting companies with significant CPO investments, while validating Broadcom's DAC-centric approach.
Broadcom's networking revenue mix will fluctuate between 33% and 40% of total AI revenue, driven by the superiority of its Tomahawk 6 switch and 1.6T DSP, positioning it as a key share gainer in AI networking.