The explosive and sustained growth in AI compute demand is turning Broadcom's hundred-billion-dollar revenue blueprint from a projection into reality.
According to FollowWind Trading Desk, UBS released its latest research report on April 13, raising its forecast for Broadcom's 2027 TPU shipments from approximately 6 million units to about 7 million units, while simultaneously significantly upgrading revenue and earnings forecasts for the next three years. The direct trigger for this adjustment was the signing of an extended long-term cooperation agreement between Broadcom and Google through 2031, as well as the latest progress in expanded collaboration among Broadcom, Google, and Anthropic.
<img src="https://imageproxy.pbkrs.com/https://wpimg-wscn.awtmt.com/84f28ff2-0428-42a2-bbcb-db3b395ad565.png?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg" alt="" original-src="https://imageproxy.pbkrs.com/https://wpimg-wscn.awtmt.com/84f28ff2-0428-42a2-bbcb-db3b395ad565.png"/>
Supported by the implementation of the aforementioned agreements and supply chain verification data, UBS raised its fiscal year 2027 revenue forecast for Broadcom from $182.2 billion to $194.9 billion, an increase of approximately 7%; and raised its fiscal year 2028 revenue forecast from $229.7 billion to $248.4 billion, an increase of approximately 8%. UBS also upgraded its fiscal year 2027 AI revenue forecast to $145.5 billion, up approximately 10% from the previous forecast of $132.7 billion, significantly exceeding the company's official guidance. However, UBS noted that most investors had already expected figures to fall within this range.
<h2>Long-Term Agreement with Google Locks in Demand; GCP TPU Spending Forecast Jumps Significantly</h2>
Broadcom and Google announced last week the signing of a new long-term agreement covering multiple generations of TPU products, including supply guarantees for critical components at the network and rack levels, extending through 2031. UBS believes this move addresses, to some extent, market concerns regarding Google potentially shifting to in-house chip development (COT)—especially given MediaTek's mass production of TPUs starting this year. However, UBS pointed out that most investors they have contacted still believe Google will remain highly dependent on Broadcom within this timeframe.
Based on the judgment of sustained strong demand for GCP and signs that some hyperscale cloud providers are increasingly utilizing GCP TPU compute power for training, UBS significantly raised its GCP TPU spending forecast: adjusted to $26.6 billion, $61.3 billion, and $78.8 billion for 2026, 2027, and 2028 respectively, compared to previous forecasts of $26.0 billion, $46.0 billion, and $61.0 billion. The forecast increase for 2027 was particularly significant, rising approximately 33% over the old forecast.
Breaking down TPU shipments, UBS expects Broadcom to ship approximately 7.32 million TPU units in 2027, driven primarily by two product lines: v7 (Ironwood, N3 process) and v8ax (Sunfish, N3 process), with shipment volumes of 4.05 million and 3.27 million units respectively.
<h2>Expanded Collaboration with Anthropic; Related TPU Order Scale Approaches $50 Billion</h2>
Coinciding with the Google agreement, an expansion arrangement for the tripartite collaboration among Broadcom, Google, and Anthropic was disclosed. Under this framework, Anthropic will gain access to approximately 3.5 gigawatts (GW) of TPU compute capacity starting in 2027, contingent upon the continued commercial success of Anthropic's operations.
On the revenue front, UBS accordingly raised its forecast for Anthropic-related TPU orders from the previous estimate of approximately $40 billion (covering 2026 to 2027) to nearly $50 billion, aligning closely with its model's revenue forecast for Anthropic of approximately $53 billion. Specifically, UBS forecasts Anthropic's TPU rack orders to be $25 billion in 2026 and $28 billion in 2027.
Business data disclosed by Anthropic during the same period also confirms the strong momentum in compute demand: its Annual Recurring Revenue (ARR) has surpassed $30 billion, a sharp increase from approximately $9 billion at the end of 2025; the number of customers with annual contract values exceeding $1 million has exceeded 1,000, doubling from approximately 500 in February. Anthropic also stated that all newly added TPU compute capacity bound to this expansion will be deployed within the United States, representing a major acceleration of its prior $50 billion commitment to US AI infrastructure.
<h2>Comprehensive Upgrade to Revenue Forecasts; AI Business Becomes Core Driver</h2>
UBS has conducted a comprehensive revision of its estimates for Broadcom. Fiscal year 2026 revenue forecast remains unchanged at $109 billion; fiscal year 2027 revenue is raised from $182.2 billion to $194.9 billion, with the year-over-year growth rate expectation increasing from 67% to 79%; fiscal year 2028 revenue is raised from $229.7 billion to $248.4 billion.
Regarding Earnings Per Share (EPS), the fiscal year 2026 forecast remains at $12.16; fiscal year 2027 is raised by 7% from $21.14 to $22.56; and fiscal year 2028 is raised by 7% from $26.83 to $28.59. For Free Cash Flow, the fiscal year 2027 forecast is raised from $97 billion to $102.1 billion, and the fiscal year 2028 forecast is raised from $132.3 billion to $141.2 billion.
From the perspective of segmented businesses, AI revenue is the core source of the upgrade. UBS expects Broadcom's Custom Compute revenue for fiscal year 2027 to reach $101.6 billion, an increase of approximately 14% over the previous forecast of $89.3 billion; AI networking revenue is forecast at $43.9 billion, essentially flat. Overall semiconductor solutions business revenue for fiscal year 2027 is raised from $152 billion to $164.7 billion.
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In terms of valuation, UBS employs a Sum-of-the-Parts (SOTP) method, applying an approximate 12x EV/FCF multiple to Broadcom's 2027 software free cash flow contribution ($42 billion) and an approximate 26x EV/FCF multiple to its semiconductor free cash flow contribution ($72.6 billion), arriving at a target price of $475, unchanged from before.
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UBS has raised its forecast for Broadcom's 2027 TPU shipments to 7 million units amid sustained growth in AI compute demand. Following a long-term cooperation agreement signed between Broadcom and Google, UBS has revised up its revenue forecasts for 2027 from $182.2 billion to $194.9 billion, and for 2028 from $229.7 billion to $248.4 billion. The AI revenue forecast was also increased to $145.5 billion. UBS believes that Google will continue to rely on Broadcom's TPU products in the future

- UBS has raised Broadcom's 2027 revenue forecast from $182.2 billion to $194.9 billion, reflecting strong AI chip demand and new long-term agreements with Google and Anthropic.  
- The adjustments predict Broadcom will ship approximately 7.32 million TPU units in 2027, primarily driven by two product models.  
- Additionally, Anthropic's TPU orders are expected to reach nearly $50 billion, supported by its increased annual recurring revenue and a growing customer base, reinforcing the demand for AI capability.

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UBS Raises Broadcom's 2027 TPU Shipment Forecast to 7 Million Units: AI Compute Demand Validates the Hundred-Billion-Dollar Revenue Story