The AI revolution has so far catapulted Nvidia into the spotlight. But while the market value of the chip manufacturer exploded to 2.7 trillion US dollars in two years, another beneficiary has quietly pushed forward: Broadcom.

The US company recorded an AI-related revenue share of over 25 percent in the latest quarter – just a few years ago it was almost zero. By June, the share is expected to rise to 30 percent, with an annual growth rate of over 40 percent. Analysts from Visible Alpha predict that the company's AI revenue will increase by 160 percent by 2027, while older business areas such as broadband chips stagnate.

Nvidia and Broadcom may both be riding the AI hype train, but their roles are fundamentally different. While Nvidia provides the standard tool for AI models with its GPUs, Broadcom develops custom chips for hyperscalers, including Google. CEO Hock Tan announced that, in addition to the three previous major customers, four more could follow.

Special chips – so-called XPUs – are considered potentially cost-efficient but can be expensive to integrate. According to Mizuho Securities, the market for custom AI accelerators could grow to $350 billion by 2027, with Broadcom competing against rivals like Marvell, MediaTek, and Alchip.

Broadcom relies on acquisitions in addition to organic growth. Since 2016, Tan has invested nearly 100 billion dollars in M&A — a sum that would have been even higher had the US government under Donald Trump not blocked an acquisition of Qualcomm in 2018.

Tan also shows ambition in forecasts. He said in December that his three largest customers could invest up to $90 billion in AI by 2027 – although it remains unclear how much of that would go to Broadcom. Now he suggests that four more customers could invest a similarly large sum.

Investors Reward Optimism. Broadcom is currently valued at 15 times the projected 2024 revenue – double its ten-year average. Since the US election in November, shares have risen by 16 percent, while Nvidia has fallen by the same amount.