Broadcom Falls 2% as $230 Billion AI Target Doubles the Delivery Test

This article first appeared on GuruFocus.

Broadcom (NASDAQ:AVGO), the custom AI chip and networking supplier, fell about 2% to $348.02 at 10.40am ET time on Thursday morning. Investors are weighing a huge promise: according to Reuters, Broadcom expects AI chip revenue of roughly $115 billion in fiscal 2027 and $230 billion in 2028.

The business already has serious momentum. Broadcom reported $16.7 billion in fiscal third-quarter AI semiconductor revenue, about 56% of its $29.59 billion total. But doubling AI sales in a year demands more than orders: chips must be made, packaged and delivered on schedule.

The valuation gap stands out. At $348.02, Broadcom trades 15.36% below the $411.18 GF Value shown in the picture. That gap may catch an investor’s eye, but the test is execution. If supply or customer deployments slip,…