Broadcom shifts focus from acquisitions to AI organic growth

Broadcom CEO Hock Tan revealed on June 5 that the semiconductor giant is pivoting away from its acquisition-heavy playbook in favor of organic growth, driven almost entirely by surging AI demand.

The numbers behind the pivot

Broadcom reported roughly $20 billion in AI semiconductor revenue for fiscal year 2025, a 65% increase year-over-year. That figure sat inside a broader revenue base of approximately $64 billion, meaning AI already accounts for nearly a third of the company’s total business.

Broadcom projects its AI semiconductor revenue will surpass $100 billion in fiscal 2027. Broadcom’s entire revenue last year was $64 billion. If the AI projection holds, the company’s chip business alone would dwarf its current total operations.

Why the acquisition machine is slowing down

Broadcom built its empire through buying. The 2023 VMware acquisition was the crown jewel of this strategy, a massive deal that folded enterprise software into Broadcom’s hardware-centric portfolio. Before that, Symantec’s enterprise security division got the same treatment.

Tan’s reasoning for the shift is rooted in opportunity cost. Custom AI chips designed for specific workloads at companies like Google, Meta, and other cloud giants represent long-term contract relationships that compound over time.

What this means for investors

The $100 billion AI semiconductor revenue target for fiscal 2027 is the number to watch. If Broadcom hits even 60-70% of that projection, the company would transition from being perceived as a diversified chipmaker-turned-acquirer into something closer to a pure-play AI infrastructure provider with a software business attached.

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