Because Broadcom Monetizes Alphabet, Meta, and OpenAI at Scale I Buy Again and Again

Broadcom (AVGO) targets $230B in AI revenue by fiscal 2028, with Q3 AI chip sales surging 221% YoY to $16.7B.

Hock Tan says custom XPUs outperform Nvidia (NVDA) GPUs at less than half the cost, making every hyperscaler a long-term Broadcom customer.

Broadcom converts 46% of revenue to free cash flow and has raised its dividend every year for 15 consecutive years.

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I keep hitting the buy button on Broadcom ( NASDAQ:AVGO ) because Hock Tan has quietly built the toll road that Alphabet, Meta, OpenAI, and Anthropic must drive down to reach their AI ambitions. Every custom accelerator these frontier labs deploy sends a fresh check to San Jose, and the checks are getting larger every quarter.

Broadcom's fiscal Q3 2026 posted revenue of $29.59B, up 85.5% year over year, with AI semiconductor revenue of $16.70B, up 221% YoY and 54% sequentially. Guidance for Q4 calls for AI chip revenue of roughly $21.7B, up 236% YoY. Hock Tan told the call, "Q3 demand was simply hot and we're just getting started."

The customer roster is where my conviction hardens. Broadcom serves six XPU customers, and management laid out the deployment map on September 2: multi-tens of billions of dollars of TPUs annually for Google, one gigawatt of Ironwood in 2026 and another five gigawatts of TPU v8i in 2027 for Anthropic, 1.3 gigawatts of Jalapeno in 2027 for OpenAI with over 5 gigawatts across successor generations in 2028, and three generations of MTIA accelerators to Meta through 2027. Tan said Broadcom is "very much on target to exceed $30 in earnings per share in fiscal 2028" against an AI revenue outlook of $230 billion in fiscal 2028.

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