Broadcom's AI Ambitions Fuel Record Forecasts Ahead of Key Shareholder Vote

Mizuho raises Broadcom's AI revenue forecast to $120B by 2027, driven by long-term deals with Meta, Google, and OpenAI. Q1 AI sales doubled to $8.4B.

Ahead of its annual shareholder meeting on Monday, Broadcom finds itself at a pivotal moment, buoyed by staggering new forecasts for its artificial intelligence business. Mizuho Securities has significantly raised its long-term outlook, now projecting the chipmaker's AI revenue will reach approximately $120 billion by 2027, a sharp increase from the $100 billion consensus estimate at the start of the year.

The investment bank reiterated its 'Outperform' rating and $480 price target following meetings with CEO Hock Tan and other executives. Mizuho's own projections are even more aggressive, anticipating AI revenue of $101 billion for fiscal 2027 and $132 billion for 2028, implying triple-digit annual growth over a three-year period.

This explosive growth is underpinned by a series of strategic, long-term partnerships that position Broadcom as a critical supplier of custom AI chips. The company now serves six major 'XPU' clients, including Alphabet, Meta, ByteDance, Fujitsu, and OpenAI. In mid-April, Meta extended its partnership with Broadcom through 2029, planning to utilize its technology for MTIA chips starting with one gigawatt of capacity and scaling to multiple gigawatts by 2027. Google has contracted Broadcom for the design of future Tensor Processing Units through 2031, while OpenAI has signed a ten-year, ten-gigawatt deal running through 2029. Additional drivers include a 3.5-gigawatt agreement with Anthropic set to begin in 2027.

The fundamental numbers already reflect this powerful momentum. For the first quarter of fiscal 2026, Broadcom's AI revenue doubled to $8.4 billion, contributing to a record total revenue of $19.3 billion, a 29% year-over-year increase. For the current second quarter, management is targeting AI revenue of $10.7 billion, which would represent a 140% surge. Overall Q2 revenue is projected to hit around $22 billion, with official results scheduled for release after the market closes on June 4.

Alongside its hardware dominance, Broadcom is sharpening its software profile through its VMware division. At the recent AI in Finance Summit in New York, the company unveiled the VMware Tanzu Platform Agent Foundations, a runtime environment for autonomous AI applications in enterprise settings that operates on a zero-trust network principle. Mizuho analysts believe the VMware infrastructure business can achieve high-single-digit to ten percent growth long-term with an operating margin near 80%, supporting annual free cash flow exceeding $54 billion.

The stock has mirrored this operational success, gaining roughly 127% over the past twelve months. Shares closed at €340.95 on Friday, sitting just under their 52-week high. The Relative Strength Index (RSI) reading of 74 indicates technically overbought conditions, a warning signal currently overshadowed by bullish fundamentals. Analyst sentiment remains strongly positive, with a consensus rating of 'Strong Buy' among the 28 covering the equity. The average price target stands at $438, with individual targets from Morgan Stanley, JPMorgan, and Citigroup at $470, $500, and $475, respectively.

Monday's shareholder meeting in Palo Alto will bring executive compensation into focus. The agenda includes the election of eight directors, the ratification of PricewaterhouseCoopers as auditor, and a vote on executive pay. More than 90% of CEO Hock Tan's compensation package is variable and equity-based, featuring performance stock units intended to extend his leadership through fiscal 2030. This vote occurs against a backdrop where company insiders have been net sellers of approximately $88 million in stock over the past 90 days.

The coming days will test whether the stock's remarkable run can continue. The Q2 earnings report and the subsequent leadership transition, with Amie Thuener set to take over as the new Chief Financial Officer on June 12, will provide critical insights into Broadcom's ability to sustain its unprecedented AI-driven growth trajectory.