Chipmakers Post Record AI Revenue Amid Supply Constraints
Nvidia, Broadcom, Micron, and Marvell report explosive growth driven by AI demand, with management citing supply limits rather than weak demand as the primary constraint for future expansion.
Major semiconductor manufacturers reported substantial revenue increases in their latest quarterly results, driven primarily by demand for artificial intelligence hardware. Nvidia recorded revenue of $96.2 billion for the fiscal second quarter of 2027, representing a 106% year-over-year increase. Broadcom’s AI semiconductor revenue reached $16.7 billion in its fiscal third quarter of 2026, up 221% from the prior year. Micron Technology more than quadrupled its sales to $41.5 billion, while Marvell Technology posted a 37% increase in revenue.
Management teams across these firms indicated that current production capacity, rather than customer demand, is limiting further growth. Nvidia executives stated that their fiscal 2028 outlook is constrained by supply availability. Similarly, Broadcom confirmed it has secured manufacturing capacity to double its AI chip revenue. These figures suggest the immediate bottleneck is in hardware production and component availability rather than a lack of corporate spending on AI infrastructure.
Management Forecasts Sustainable Growth
Nvidia projects approximately 70% revenue growth for fiscal 2028, maintaining its position as the dominant provider of AI computing platforms. Broadcom expects to reach $115 billion in AI revenue for fiscal 2027 and $230 billion in the following year, supported by custom accelerator designs that account for 73% of its AI sales. Marvell anticipates revenue of about $18 billion in fiscal 2028, up from roughly $12 billion in the current year, with its custom business segment more than doubling.
Micron’s guidance for the fiscal fourth quarter indicates revenue of approximately $50 billion, reflecting continued strength in memory components essential for AI hardware. The company’s non-GAAP gross margin expanded to 84.9%, up from 39% a year earlier. These forward-looking figures rely on the assumption that AI infrastructure spending remains robust and that companies can continue to secure sufficient supply of advanced chips and memory modules.
Valuation Reflects High Expectations
Market valuations for these semiconductor stocks vary based on their respective growth trajectories and market positioning. Nvidia shares trade at approximately 14 times estimated fiscal 2028 earnings, while Broadcom is valued at about 18 times its fiscal 2027 expected earnings. Marvell commands a higher multiple of roughly 33 times its fiscal 2028 earnings, reflecting its role as an aggressive player in the custom chip market. According to GN auto stocks/technology: chip stocks, these multiples incorporate expectations of sustained high growth over the next several years.
Micron offers a lower valuation at about 6 times analysts’ fiscal 2027 earnings estimates, despite its record profits. This discount may reflect the cyclical nature of the memory market, where margins can fluctuate significantly with commodity prices. Investors are assessing whether the current record-high margins for memory producers will persist as AI hardware adoption matures and supply chains stabilize. The divergence in multiples highlights differing market perceptions of each company’s long-term structural advantage in the AI supply chain.
Supply Chain Risks Remain
While demand for AI chips remains strong, the ability to meet that demand is the critical variable for future performance. Nvidia’s reliance on data center sales, which accounted for $89 billion of its recent quarter’s revenue, exposes it to capital expenditure cycles of large cloud providers. Broadcom’s strategy depends on delivering custom accelerators to a limited number of major clients on schedule. Any delays in manufacturing or shifts in customer strategy toward in-house chip development could impact revenue projections.
Micron faces the challenge of maintaining its high gross margins as the memory market evolves. The company’s current profitability is partly driven by tight supply conditions that may ease as new production capacity comes online. For Marvell, the high valuation requires that its design wins continue to ramp up as anticipated. The collective performance of these firms over the next four years will depend on their ability to navigate supply constraints, manage customer relationships, and sustain innovation in AI-specific hardware.
