Get Ready for ASIC Shipments to Triple With This Leading AI Stock

The artificial intelligence infrastructure race is heating up, and Broadcom (AVGO) is projected to retain its leadership as an AI server compute ASIC design partner with 60% market share in 2027, according to Counterpoint Research.

As tech giants like Alphabet (GOOGL) (GOOG), Amazon (AMZN), Microsoft (MSFT), and Meta (META) accelerate their shift toward custom AI chips, the entire ASIC market is poised for explosive growth.

AI server compute ASIC shipments are expected to triple by 2027 as hyperscalers build out massive infrastructure to support their AI ambitions. This surge is driven by the rampant demand for specialized chips that power everything from Google’s Gemini models to Amazon’s Trainium clusters and Microsoft’s Maia processors.

What makes this trend particularly compelling for investors is the structural shift happening across the industry. “In-house AI Server Compute ASIC design growth is validating the in-house custom XPU era, where AI accelerators are tailor-made for special and specific workloads,” explained Counterpoint analyst Neil Shah.

As power and space constraints intensify, hyperscalers are increasingly turning to custom silicon solutions, and Broadcom is at the center of this transformation as the dominant design partner enabling it.

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Broadcom is cementing its position as a dominant player in the booming artificial intelligence infrastructure market.

In fiscal 2025 (ended in October), Broadcom reported AI sales of $20 billion, up 65% year-over-year (YoY).

It expects AI revenue to double in fiscal Q1 of 2026 to over $8 billion.

Notably, CEO Hock Tan’s compensation incentives are tied to growing AI revenue to over $120 billion by 2030.

Broadcom has a comprehensive product portfolio in the AI data center segment. Beyond custom AI accelerators, it provides critical networking components, including Tomahawk switches, digital signal processors, optical components, and PCI Express switches.

The company currently holds over $73 billion in AI-related backlog expected to ship over the next 18 months, with $53 billion of that tied to custom accelerators alone. The market dynamics are shifting in Broadcom’s favor as hyperscalers adopt custom silicon solutions optimized for their specific workloads.

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While Nvidia (NVDA) dominates the general-purpose GPU market, companies building large language models (LLMs) are turning to application-specific integrated circuits that deliver better performance per watt for their unique requirements. Broadcom has already secured five major customers for custom accelerators, with demand continuing to accelerate.

Broadcom’s networking business will also benefit from this AI buildout. The company’s latest Tomahawk 6 switch, capable of 102 terabits per second, has generated record orders with a backlog exceeding $10 billion.

As AI clusters scale to hundreds of thousands of processors, the networking infrastructure becomes increasingly critical and complex, playing directly into Broadcom’s engineering strengths.

With the total consolidated backlog reaching $162 billion and AI accounting for nearly half of that figure, Broadcom appears well-positioned to capitalize on the multi-year AI infrastructure buildout. The company expects this momentum to continue accelerating through 2026 and beyond as customers compete to scale their AI capabilities.

Valued at a market cap of $1.6 trillion, AVGO stock has surged 457% over the last three years and 2,388% in the past decade.

Analysts tracking AVGO stock forecast revenue to grow from $63.9 billion in fiscal 2025 to $236 billion in fiscal 2030. In this period, adjusted earnings are forecast to expand from $6.82 per share to $23.37 per share.

If AVGO stock is priced at 25x forward earnings, which is below its current 33x multiple, it should trade around $825 in late 2029, indicating an upside potential of almost 150% from current levels.

Out of the 42 analysts covering AVGO stock, 36 recommend “Strong Buy,” three recommend “Moderate Buy,” and three recommend “Hold.” The average AVGO stock price is $455.22, above the current price of $333.

On the date of publication, Aditya Raghunath did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. This article was originally published on Barchart.com

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