Broadcom's CEO, Hock Tan, has the potential to receive a substantial stock-based compensation if the company achieves $120 billion in AI product sales by 2030. This ambitious target is part of Tan's contract extension, incentivising him to continue his leadership. The compensation is tied to performance stock units (PSUs) that vest upon reaching the AI revenue goal between fiscal years 2028 and 2030, alongside ongoing service requirements.
Broadcom's focus on AI has already yielded significant growth, with AI semiconductor revenue reaching $5.2 billion in the last quarter, a 63% year-over-year increase. The company anticipates further acceleration, projecting $6.2 billion in AI semiconductor revenue for the next quarter. Broadcom's AI strategy centres on custom AI chips, known as application-specific integrated circuits (ASICs), and networking gear. These chips provide alternatives to GPUs for cloud giants.
Analysts are optimistic about Broadcom's AI prospects, with some estimating AI-related sales could exceed $40 billion in 2026. Broadcom's total backlog has surpassed $110 billion, driven largely by AI. The company's success in the AI sector has boosted its stock valuation, with shares rising.
