JPMorgan: Custom AI Chips to Surpass GPUs by 2027; Broadcom (AVGO) Poised for Growth, NVIDIA (NVDA) Market Share Diluted

JPMorgan forecasts custom AI chips (ASICs) will surpass GPUs in global shipments by 2027, challenging NVIDIA's (NVDA) long-standing dominance. This shift, driven by major cloud providers developing their own silicon, positions Broadcom (AVGO) as a primary beneficiary. The transition marks a move from a GPU-centric market to a "dual-track" era, primarily fueled by the increasing demand for power efficiency in data centers. The report projects ASICs to comprise 53% of AI chip shipments in 2027, up from 42% in 2026. ASIC shipments are expected to grow 109% in 2026, significantly outpacing GPUs' 39% growth. Cloud giants like Google (GOOGL), Amazon (AMZN), Microsoft (MSFT), and Meta (META) are actively deploying proprietary ASIC architectures. JPMorgan estimates Broadcom's (AVGO) AI ASIC and networking revenue will exceed $150 billion in 2027, more than double the estimated $60 billion in 2026, due to its deep involvement in custom chip projects. The drive for higher performance per watt, amid power supply constraints, is cited as the fundamental reason for this architectural shift.