Broadcom Secures $100 Billion AI Order, Boosts 2026 Growth Projections by 66%

During a recent earnings call, Broadcom announced a significant milestone in its AI chip business, securing a new order worth over 100 billion dollars from a major client. This substantial order has prompted the company to significantly raise its growth projections for 2026, indicating a more robust expansion in its AI revenue compared to previous estimates. The company's CEO has also announced plans to remain in the role until 2030, providing stability and continuity in leadership.

Broadcom's AI business has been a standout performer, with the company reporting record third-quarter revenue of 160 billion dollars, driven by strong demand for AI semiconductors and VMware software. The company's AI semiconductor revenue grew by 63% year-over-year, reaching 52 billion dollars, and is expected to continue its strong growth trajectory into the fourth quarter. The company's AI revenue is projected to reach 62 billion dollars in the fourth quarter, representing a 66% year-over-year increase.

The new 100 billion dollar order is expected to begin shipping in the second half of the 2026 fiscal year, with significant deliveries anticipated in the third quarter. This order, combined with continued strong demand from existing clients, has led Broadcom to revise its AI revenue growth projections for 2026, expecting a "significant improvement" over the previous year. The company's total backlog of orders has reached a record 1100 billion dollars, with AI orders contributing significantly to this figure.

While Broadcom's AI business continues to thrive, its traditional non-AI semiconductor business has shown slower recovery. The company reported 40 billion dollars in non-AI semiconductor revenue for the third quarter, flat compared to the previous quarter. The company expects low double-digit sequential growth in the fourth quarter, driven by seasonal factors in wireless and server storage businesses. However, the company anticipates a more gradual "U-shaped" recovery for its non-AI semiconductor business, with meaningful growth expected in the latter half of 2026.

Broadcom is also focusing on its networking capabilities to support the growing demands of AI clusters. The company has introduced new products, such as the Tomahawk 6 and Jericho 4, to address the challenges of scaling AI networks. These products are designed to reduce network latency and support large-scale AI clusters across multiple data centers. The company remains confident in the open Ethernet standard as the preferred protocol for AI networking, citing its maturity and widespread adoption.

In addition to its AI and semiconductor businesses, Broadcom's software division, which includes VMware, continues to perform well. The company reported 68 billion dollars in infrastructure software revenue for the third quarter, up 17% year-over-year. The launch of VMware Cloud Foundation 9.0, a fully integrated cloud platform, is expected to drive further growth in the software business as more customers adopt the platform.

Overall, Broadcom's strong performance in AI and software, combined with its strategic investments in networking and leadership stability, positions the company for continued growth and success in the coming years. The company's focus on innovation and customer satisfaction, along with its commitment to long-term growth, makes it a leader in the semiconductor and software industries.