Broadcom Names Anthropic as Its Largest Future XPU Customer

Broadcom expects Anthropic to become its largest custom AI accelerator customer in 2027 and to hold that position through 2028, displacing Google from the top spot the company has occupied for years.

Management laid out the deployment schedule on its third-quarter earnings call. Broadcom plans to deploy 1 gigawatt of Ironwood capacity for Anthropic during 2026, followed by another 5 GW based on TPU version 8i in 2027. Beyond that, the company sees a path toward another 10 GW in 2028 — a cumulative 16 GW buildout tied to the rapid expansion of frontier AI models.

Broadcom believes the leading developers of frontier models will need substantially more computing capacity in 2027 and 2028, expanding its infrastructure opportunity in the process. Larger AI clusters also increase Broadcom's networking exposure. The company said its Tomahawk 6 switch is being deployed across AI hyperscalers building XPUs with Broadcom, while adoption of its newer Tomahawk Ultra product is beginning in scale-up applications.

The numbers behind the shift

The Anthropic disclosure landed in a quarter that already showed explosive AI growth. Broadcom's AI semiconductor revenue rose 54% sequentially and 221% year over year to $16.7 billion, accounting for 56% of total quarterly revenue. The company forecasts $21.7 billion of AI semiconductor revenue in Q4, which would represent 236% year-over-year growth and lift fiscal 2026 AI revenue to $58 billion.

Broadcom now projects AI semiconductor revenue of $115 billion in fiscal 2027 and $230 billion in fiscal 2028. Management tied those targets to expected deployments across its six XPU customers and the supply visibility those relationships provide. Broadcom estimates each gigawatt of compute deployed by frontier AI companies could support roughly $30 billion in annualized revenue for those customers.

What Anthropic gets

Becoming Broadcom's top XPU customer strengthens Anthropic's own growth story. The company is locking in infrastructure for enormous future AI workloads, and overtaking Google within Broadcom's customer base signals how large its scale has become.

Anthropic's revenue is already accelerating. According to Reuters, its annualized revenue rate surpassed $65 billion by July, and the company projects roughly $190 billion to $200 billion in revenue for fiscal 2028.

"It's an open secret Anthropic is well on its way to an IPO. And with that, its investment credit will change," Broadcom CEO Hock Tan said during the earnings call. Tan was implying that a public listing could alter Anthropic's credit standing, which in turn could affect how it finances the massive infrastructure buildout required for its planned deployments.

Google stays, but no longer defines the story

Anthropic's rise does not mean the Google relationship is fading. Broadcom recently strengthened its long-term agreement covering "future generations of TPUs and AI networking." Under the deal, Broadcom will supply Google with TPUs worth billions of dollars annually over several years, with additional generations planned as Google's AI infrastructure expands into 2028 and 2029.

The strategic shift is concentration risk. Broadcom's custom-chip business now spans six XPU customers — including OpenAI and Meta Platforms — rather than depending on a single hyperscaler. OpenAI will soon begin deploying its first custom accelerator, called Jalapeno, with 1.3 GW expected in 2027 and more than 5 GW of deployments across Jalapeno and its "successor generation" projected for 2028.

The caveats are real. Execution on the $230 billion fiscal 2028 target depends on manufacturing capacity, components, memory, data-center construction, and the pace at which Broadcom's six customers can bring their planned systems online.

Wall Street's verdict

Analysts remain firmly behind the stock. Broadcom carries a consensus "Strong Buy" rating, with 35 of 43 covering analysts at "Strong Buy," three at "Moderate Buy," and five at "Hold." AVGO has gained just 5% year to date, but the average target price of $523.53 implies roughly 44% upside, and the Street-high estimate of $715 suggests as much as 96% upside over the next 12 months.

The near-term test for investors will be whether Anthropic's 16 GW deployment schedule — and the supply chains behind it — stays on track through 2028.