Broadcom Stock Gets Cheaper as AI Revenue Heads to $230B, BofA Sees $3.2T Chip Market

• Broadcom stock trades near 20x forward earnings even as Q3 revenue jumped 86% to $29.6 billion
• Broadcom revenue from AI chips reached $16.7 billion in Q3, with management targeting about $115 billion in FY2027 and $230 billion in FY2028
• BofA sees the global semiconductor market reaching $3.2 trillion by 2030, giving AVGO stock a much larger industry backdrop

Broadcom stock is trading at a very different valuation from where it stood a year ago, even though the numbers coming out of its AI business have moved sharply higher. AVGO stock now sits near 20 times forward earnings after a bigger pullback across chip names. At the same time, Broadcom revenue is setting records, and Hock Tan is putting much bigger figures behind the company’s custom AI chip business.

Also Read: Bitcoin Faces Biggest Test as Bull Score Falls to 60 and $520M Leaves ETFs

Broadcom Stock Gets Cheaper as AI Sales Jump

Broadcom trades at roughly 20.2 times forward earnings, according to reports, after its valuation compressed during the recent semiconductor selloff. It compares with multiples above 30 times a year ago.

The cheaper multiple comes despite another record quarter. Broadcom reported $29.6 billion in Q3 revenue, up 86% from a year earlier. Net income more than tripled to $13.1 billion, while free cash flow reached $13.7 billion.

The AI business did even better. Semiconductor revenue tied to AI reached $16.7 billion, up 221% year over year and 54% from the previous quarter. Broadcom expects that figure to climb to around $21.7 billion in Q4, a 236% annual increase.

This helps explain why the recent weakness in AVGO stock has stood out. The share price has cooled while the underlying AI numbers continue to accelerate.

Also Read: SanDisk Stock Hits Record Losing Streak as Citi Sees Shortage Through 2031, Goldman Eyes $71B Revenue

Broadcom Revenue Could Reach $230B From AI

Hock Tan is now looking well beyond the next quarter. Broadcom expects AI chip sales of roughly $115 billion in fiscal 2027, up from an earlier forecast above $100 billion. Management then sees the figure doubling again to about $230 billion in fiscal 2028.

The growth is coming from both custom accelerators and the networking hardware needed to connect massive AI clusters. Broadcom already works on custom silicon programs for major customers, including Google and OpenAI, giving it exposure to companies building alternatives to Nvidia GPUs.

BofA Sees Semiconductor Market Reaching $3.2T

The industry around Broadcom is also getting larger. Bank of America analyst Vivek Arya expects the global semiconductor market to grow from roughly $1.7 trillion in 2026 to $3.2 trillion by 2030, helped by AI infrastructure, memory, networking, and improving automotive and industrial demand. Arya wrote,

“Memory-chip shortages and price inflation remain a critical lever behind industry growth upside.”

The forecast does not guarantee a rebound in Broadcom stock, especially after the huge gains chip stocks have already delivered. But with AI sales potentially reaching $230 billion and the forward multiple back near 20 times, the valuation now looks very different from the growth rates showing up in Broadcom’s results.

Also Read: Two Crypto Bills Advance in House as Gillibrand Says CLARITY Act Fight Is Not Over