Well, this is a tough time to come out to San Francisco, a day when the whole AI complex is getting hammered because Anthropic and OpenAI seem to be, I don't know, pulling in their horns. Actually, I think there's some real bargains in this group. Take Broadcom, the maker of chips, networking equipment and tech infrastructure and software with a stock that's down more than 10% over the past month. At the beginning of this month, Broadcom reported a strong set of results, issued a spectacular multi-year forecast. But their guidance for the current quarter was, I don't know, viewed by some as in line. The stock got slammed. I think Broadcom is still on track to put up some incredible growth because they're at the heart of the AI ecosystem. Because the company's never let us down in all the years my charitable trust has owned it. And down here roughly 150 points below its June high, stock may be too cheap to ignore. Don't take it from me. Let's check in with the legendary Hock Tan, President and CEO of Broadcom, to learn more. Mr. Tan, welcome back to Mad Money.
All right. So Hock, you laid out a forecast that was so fantastic, $350 billion in the next two years. And you sounded very certain. Is there anything that's happened in this whole debate about the AI slowdown that would give you pause to that prediction?
No, not in the least. We see the demand for compute infrastructure for AI, development of AI frontier models, and inference for the products that they feed to the world as continuing to be very strong and, I believe, very durable.
Okay. Now, you are also an expert in finance, and you've been able to get some really great companies to work with you to create creative sources of finance. Do you need, say, OpenAI or do you need Anthropic to do an IPO soon? I know OpenAI is saying they're going to put it off in order to have some, you know, perfect surety because I know I'd be worried if they don't do an IPO or they have a hard time doing it, that I might not get paid.
That's a fair question. And we have six customers, only six. But they are all creating frontier models or LLMs as we know it. Because my view is the real value to be created out of this phenomenon of generative AI and the compute that goes with it comes from the companies, enterprises who are creating their own frontier models. Of the six, two, OpenAI and Anthropic, are ones that are what I consider cash flow poor. But they are valuation rich because they have great technology. And we're creating very good products for these guys to enable them to continue to improve their frontier model development. So what we've done, given their performance and they have shown they have been very successful so far, particularly Anthropic, even OpenAI, we are enabling, we're creating a platform by bringing in strong financial partners, not your traditional finance partners, but partners who are willing to look at these companies. And in a way, like the credit and the opportunity and the potential these guys have and are willing to extend them credit, which is enabling them, creating a platform. And these companies are Apollo, Blackstone, who loves this sort of opportunity, steps in because the rates are better than going Treasury for sure.
And they create some confidence. I mean, if you say OpenAI goes out and says, listen, we're not going to do an IPO, those two companies, which by the way, I know and are very hard-nosed, they are willing to lend.
Absolutely. They are. We're finding out that it's not difficult at all to find these kind of financial partners willing to come in and fund the infrastructure of these guys, even as the demand from these two guys is just huge over the next few years.
Perfect. Now let's talk about that. Last quarter, you, I cared a lot and we said it to club members. Look, what are you saying? Q10 is saying 27 and 28 are going to be amazing. He's always been money good on his projections. If that's the case, I think you could earn as much as $20 a share in 2028. I know you said in your talk, we will make judgments over allocations and what to do with capital in December. But if you know that you're going to do that, tell people why it isn't a good idea to be really big right now in buying.
Well, the way we have been conservative in judging the number for 28, we're putting out there that just on AI revenue alone, which is the custom AI accelerators we are providing for six customers, the networking that goes hand in hand, those are, we are a chip company. We sell those chips that goes into their infrastructure. We believe we will hit $230 billion alone for those products in 28. That plus our existing non-AI business in software, semiconductors, I indicated will exceed $30 a share in 2028. Wow. Not $2,030 a share.
So if that's the case, I mean, I'd be buying, you know, I wouldn't wait till December. I'd be buying a huge amount of stock in the open market.
That's exactly my view, exactly what it is. But we will earn our way into our valuation, Jim.
Okay. Because I think sometimes people don't look at the numbers. They just make judgments. The judgment should be based on the numbers. There's something you taught me in many years that I've read your conference calls. Now, you were pretty tough in saying that NVIDIA's product, which we know NVIDIA is a great company, yes it is, your Jalapeno chip you think is very competitive versus Grace Blackwell when it comes to inference. Can you tell people bold supposition, knowing everyone feels that NVIDIA is untouchable?
No. Here's the interesting part of the whole thing. Technology, if you will, co-design silicon XPU. We call it our custom accelerator. Every, the layout of the transistor, you co-design the chip with a frontier model developer, the algorithm guys, the data scientists who tells you the kind of workloads they need architected. And you create a chip that matches the kind of workloads they need. Your chip will perform anytime much better than a general-purpose GPU. That's the underlying premise behind it all.
