Broadcom’s AI Chip Business Poised for Massive Revenue Surge, Analysts Say

A major Wall Street firm has issued a bullish upgrade for Broadcom, citing explosive growth projections for the company's custom artificial intelligence chip division. Wolfe Research shifted its rating on the semiconductor giant from "Peer Perform" to "Outperform," accompanied by a $400 price target.

The central thesis from Wolfe Research analyst Chris Caso hinges on Broadcom's application-specific integrated circuits (ASICs) designed for AI. The firm projects this segment will generate approximately $44 billion in revenue during 2026. Their outlook becomes even more ambitious for the following year, forecasting a leap to $78.4 billion in 2027 ASIC sales. This anticipated surge is attributed primarily to increased shipments of Tensor Processing Units (TPUs).

Beyond custom chips, Wolfe also anticipates significant growth in AI networking revenue. The bank estimates a rise of roughly 75% in this category for the current year, reaching about $15.1 billion.

Institutional Confidence and Strong Fundamentals

This analyst action coincides with notable institutional buying. Investment data from Barchart indicates that Cathie Wood's ARK Invest purchased Broadcom shares valued at $26 million. This move follows a similar bullish signal from Wells Fargo, which raised its own price target on Broadcom in early January, also pointing to the company's strengths in AI semiconductors.

Should investors sell immediately? Or is it worth buying Broadcom?

Broadcom's recent financial performance provides a solid foundation for this optimism. The company, which currently commands a market capitalization of around $1.56 trillion, reported fourth-quarter revenue of $18.02 billion, representing a 28% year-over-year increase. Furthermore, management disclosed a substantial backlog of $162 billion in orders, with $73 billion expected to be recognized over the next six quarters.

A Key Player in AI Infrastructure

The convergence of an analyst upgrade, institutional investment, and a robust order book underscores Broadcom's perceived role as a central beneficiary of the ongoing build-out of AI infrastructure. The company is set to remain in the spotlight for institutional investors on Friday, January 30, 2026.

Market observers suggest that the upcoming quarterly reports will be critical in validating the ambitious revenue projections for 2026 and 2027, which will likely be a primary driver of the stock's trajectory in the months ahead.