Broadcom shares jumped about 7% before the bell Thursday after the company said it expects artificial intelligence chip sales to top $100 billion in 2027, as it pushes into a market long ruled by Nvidia.

Big Tech firms such as Alphabet, Microsoft , Amazon and Meta are expected to spend more than $600 billion to build AI infrastructure this year, boosting demand for chips, servers, storage and networking equipment.

Broadcom expects to deliver 3 gigawatts worth of tensor processing units for AI work to Anthropic in 2027, and plans to ship OpenAI's first AI chip, delivering over 1 GW, in the same year.

The volumes put Broadcom closer to the scale of recent AI chip deals by Nvidia and AMD.

Investors are, however, questioning whether heavy spending on AI will generate sufficient returns to justify the lofty valuations, leading to sharp declines in the world's most valuable technology stocks.

Broadcom's stock is down about 8.3% so far this year, while Nvidia is down about 2%.

"The AI spend overhang will still linger, but Broadcom made a strong case for their AI revenue to outgrow the market," said analysts at Jefferies.

Broadcom expects second-quarter revenue to be about $22 billion, above analysts' average estimate of $20.56 billion, according to data compiled by LSEG. It projects AI chip revenue of $10.7 billion in the quarter.

The company also announced a new share repurchase program of up to $10 billion through the end of the year.