Shares of Broadcom surged 14% on Friday, propelling the chipmaker closer to a $1 trillion market valuation. The rally followed the company’s strong revenue forecast for the first quarter, which exceeded Wall Street estimates, and its projected sustained demand for custom AI chips in the years ahead.

Broadcom’s premarket performance indicated an addition of approximately $120 billion to its $843 billion market value. Rival Marvell Technology also saw gains, with its shares rising 5.3%.

Broadcom has established itself as a leading supplier of custom AI chips, catering to major technology firms seeking alternatives to Nvidia’s supply-constrained and expensive processors. This shift has fueled a 62% rise in Broadcom’s stock this year.

CEO Hock Tan projected a potential revenue opportunity of $60 billion to $90 billion from the AI market by fiscal 2027. Broadcom has already secured two major hyperscaler customers—large cloud service providers—underscoring its foothold in the growing market.

For fiscal 2024, Broadcom estimates capturing over $12 billion in AI-related revenue, representing more than 70% of the addressable AI market, totaling between $15 billion and $20 billion. This figure includes earnings from custom AI chips and networking equipment for data centers.

At least 16 brokerages raised their price targets for Broadcom, with the median target reaching $210, a 16% increase from the company’s last closing price.

Broadcom’s valuation remains competitive, with a forward price-to-earnings ratio of 29.8, compared to Nvidia’s 31.03 and Marvell’s 41.14.