Just six custom chip customers contributed to most of a 221% rise in AI chip revenue for Broadcom in its latest record quarter, but investors still want more.

The chip maker said Wednesday that it had recorded $29.6 billion for the third quarter of FY2026, a year-on-year increase of 86%, as it profits from high interest in custom chips (XPUs) from AI labs and hyperscalers.

During an earnings call, CEO Tan said the company was seeing "exponential growth in demand" from XPU customers: "We expect their need for compute infrastructure to inflate even more in 2027 and 2028."

This was reflected in Broadcom's outlook, with CFO Amie Thuener projecting AI revenue to double again in 2027 and 2028. However, its shares dropped around 3% in pre-market trading after the call, with Morningstar flagging that investor concerns about a reliance on OpenAI and Anthropic may have undervalued stocks.

AI labs driving most demand

Get the full story: Subscribe for free

Join peers managing over $100 billion in annual IT spend and subscribe to unlock full access to The Stack’s analysis and events.

Subscribe now

Already a member? Sign in