Broadcom shares rose nearly 3% on Thursday after the company forecast more than $100 billion in AI chip sales next year, signaling rapid share gains in a market dominated by Nvidia.

Big tech’s push to secure the massive computing power needed for artificial intelligence has lifted Broadcom into the data-center infrastructure race as it helps design custom processors that can serve as alternatives to Nvidia’s expensive chips.

Alphabet, Microsoft, Amazon and Meta are expected to spend more than $600 billion this year building AI infrastructure, fueling demand for chips, servers, storage and networking equipment.

Broadcom, which supplies semiconductors and infrastructure software, has visibility to about 10 gigawatts worth of AI demand from its clients such as Anthropic and Meta Platforms in 2027, Melius Research analysts said.

This demand is equal to the power consumption needs of more than 8 million US homes.

The volumes put Broadcom near the scale of recent AI chip deals by Nvidia and AMD, as the rise of custom processors, known as ASICs, increasingly threaten Nvidia’s stronghold in the advanced data-center infrastructure market.

Eliminating the AI ​​fear

Both Broadcom and its rival, Nvidia, have seen their shares fall so far this year, amid investor concerns about whether spending heavily on AI will yield enough returns to justify high tech valuations.

“While investors continue to debate the sustainability of AI capex growth, our industry research suggests the opportunity for Broadcom is expanding rather than peaking,” Summit Insights analysts said in a note on Wednesday.

Thursday’s rally could add more than $42 billion to Broadcom’s market value, if gains hold.

CEO Hock Tan assured investors that the company is well-positioned amid widespread supply shortages and limited capacity of memory chips at AI processor maker TSMC.

The company has achieved fully secured capacity for lead-edge wafers and high-bandwidth memory by 2028, he said on Wednesday.