Mizuho is bullish on this major AI chip stock

Investing.com -- Mizuho reiterated its Outperform rating on Broadcom (NASDAQ: AVGO) after meeting with the company’s top executives, pointing to an accelerating pipeline of custom AI chip deals as one of its main takeaways.

Analysts at the firm hosted Broadcom CEO Hock Tan, CFO Kirsten Spears, and Head of Investor Relations Ji Yoo for an investor call, coming away with increased confidence in the company’s AI revenue trajectory through 2027 and beyond.

Mizuho highlighted several key talking points from the call, including Broadcom’s 3.5-gigawatt deal tied to Anthropic’s TPU chip deployments, which are expected to kick off in 2027.

The broker believes the arrangement covers only TPU v8, “with potentially further upside as subsequent TPU generations ramp, driving follow-on deals.”

Broadcom’s partnership with Meta Platforms was also highlighted by the analysts. The team cited Meta’s expansion of its MTIA chip development and deployment through 2029, spanning multiple chip generations and multi-gigawatt buildouts. Mizuho estimates a tailwind of roughly $25 billion per gigawatt for Broadcom from these arrangements.

On the networking side, the brokerage believes Broadcom will benefit from a shift toward hybrid copper-optical deployments as next-generation AI racks scale up. Analysts think that Broadcom is already running 400G-800G per lane SerDes technology, enabling copper to handle short-reach rack connections while optical adoption grows for longer distances.

Laser supply, however, remains a constraint. Analysts said they see supply staying "very tight.”

Taken together, the analysts see Broadcom’s consensus AI revenue estimate for 2027 climbing from around $100 billion in early 2026 to approximately $120 billion currently, a roughly 62% increase year-over-year.

The firm’s estimates put AI revenues at $101 billion in fiscal 2027 and $132 billion in fiscal 2028, representing an 87% three-year compound annual growth rate.

Beyond AI chips, the team also pointed to the VMware infrastructure software segment as an additional pillar of stability, seen as a high-single-digit to low-double-digit long-term grower operating at roughly 80% operating margins.

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