Chip Stock Investor Podcast Broadcom’s Custom Silicon Empire: Is AVGO Stock a Buy?
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Mar 7, 2026 Broadcom’s Q2 revenue guide and explosive AI chip sales grab the spotlight. New 3.5D XDSiP custom accelerators and chiplet stacking are explained. Big tech and AI labs named as customers driving hyperscaler demand. Capital moves, debt from the VMware deal, and valuation math are examined.
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AI Semiconductors Power Rapid Revenue Growth
- Broadcom's revenue trajectory through 2026 is fueled by AI semiconductors, with Q2 fiscal 2026 guidance of $22B implying 47% year-over-year growth.
- AI semiconductor sales are projected to reach $10.7B in Q2, up ~140% YoY driven by XPUs and networking, giving line of sight to >$100B revenue in 2027.
3.5D Face-To-Face Packaging Lowers Latency
- Broadcom's new 3.5D XDSiP platform stacks XPUs and IO chiplets face-to-face to cut latency and boost bandwidth for HBM communication.
- The design uses vertical stacking on an interposer with active circuits contacting IO chiplets, improving accelerator performance for hyperscalers.
Hyperscalers Drive Custom Accelerator Demand
- Broadcom currently serves six major customers with custom accelerators, including Google, Meta, Anthropic, and OpenAI.
- Google is the largest buyer now, while Meta and leading AI labs are preparing deployments soon, concentrating hyperscaler demand.