Broadcom Secures $10 Billion AI Chip Deal, Challenging Nvidia's Dominance

Broadcom to Work With OpenAI on New AI Chip

Broadcom is helping OpenAI design and produce an artificial intelligence accelerator from 2026, getting into a lucrative sphere dominated by Nvidia. Broadcom's shares jumped by the most since April. The two firms plan to ship the first chips in that lineup starting next year, a person familiar with the matter said, asking to remain anonymous discussing a private deal. OpenAI will initially use the chip for its own internal purposes, the Financial Times reported earlier. Accelerators are essential to the development of AI at big tech firms from Meta Platforms to Microsoft. Bloomberg News has previously reported that OpenAI and Broadcom were working on an inference chip design, intended to run or operate artificial intelligence services after they had been trained. Mandeep Singh, Global Head of Technology Research for Bloomberg Intelligence, breaks down the stock's movement with Paul Sweeney and Scarlet Fu. (Source: Bloomberg)

Broadcom sees fourth-quarter revenue above estimates on growing AI chip demand

Sept 4 (Reuters) - Broadcom (AVGO.O), opens new tab forecast fourth-quarter revenue above Wall Street estimates on Thursday, bolstered by strong demand for its custom AI chips as enterprise clients invest heavily in data centers and machine learning applications. The company has been one of the biggest beneficiaries of the generative artificial intelligence boom, with hyperscale customers, including Google (GOOGL.O), opens new tab, adopting its custom accelerators due to their ability to process large quantities of data quickly. Its chips have also emerged as an alternative to Nvidia's (NVDA.O), opens new tab costly processors as companies look for hardware that can be tailored to specific needs as AI becomes increasingly advanced. "We expect growth in AI semiconductor revenue to accelerate to $6.2 billion in Q4," said Broadcom CEO Hock Tan. Its AI revenue grew 63% to $5.2 billion in the third quarter ended August 3. Broadcom has been aggressive in rolling out new chips to challenge Nvidia's dominant position in the AI semiconductor industry. This year it launched the Tomahawk Ultra networking chip and a next-generation Jericho networking chip to speed up AI compute. Its shares were up nearly 1% in extended trading. They have risen over 30% so far this year, building on a more than threefold surge in the past two years. Broadcom expects fourth-quarter revenue to be around $17.4 billion, compared with analysts' average estimate of $17.01 billion, according to data compiled by LSEG. The company's third-quarter revenue of $15.95 billion beat the estimate of $15.83 billion. Reporting by Zaheer Kachwala in Bengaluru; Editing by Shilpi Majumdar Our Standards: The Thomson Reuters Trust Principles., opens new tab

Broadcom forecasts upbeat fourth-quarter revenue as AI chip demand soars

Sept 4 (Reuters) - Broadcom (AVGO.O), opens new tab forecast fourth-quarter revenue above Wall Street estimates on Thursday, banking on strong demand for its custom AI chips as enterprise clients invest heavily in data centers and machine learning applications. The company has been one of the biggest beneficiaries of the generative artificial intelligence boom, with hyperscale customers, including Google (GOOGL.O), opens new tab, adopting its custom accelerators due to their ability to process large quantities of data quickly. Its chips have also emerged as an alternative to Nvidia's (NVDA.O), opens new tab costly processors as companies look for hardware that can be tailored to specific needs as AI becomes increasingly advanced. "We expect growth in AI semiconductor revenue to accelerate to $6.2 billion in Q4," said Broadcom CEO Hock Tan. AI revenue grew 63% to $5.2 billion in the third quarter ended August 3. Investors have placed high expectations on AI-focused chip firms such as Broadcom as they bet on its strong market position and expanding product lineup to fuel rapid growth. This year the company has launched the Tomahawk Ultra networking chip and a next-generation Jericho networking chip to speed up AI compute, as part of its push to challenge Nvidia's dominance in the AI semiconductor industry. "Broadcom's AI-related semiconductor demand continues to shine. Results were driven by both AI interconnectivity, along with its custom ASIC business," said Summit Insights analyst Kinngai Chan. Application-specific integrated circuit, or ASIC, is a chip designed for specific tasks. Broadcom shares were up 3% in extended trading. They have risen over 30% so far this year, building on a more than threefold surge in the past two years. The company expects fourth-quarter revenue to be around $17.4 billion, compared with analysts' average estimate of $17.01 billion, according to data compiled by LSEG. Its third-quarter revenue of $15.95 billion beat the estimate of $15.83 billion. Reporting by Zaheer Kachwala in Bengaluru; Editing by Shilpi Majumdar Our Standards: The Thomson Reuters Trust Principles., opens new tab

Broadcom sees strong AI growth for fiscal 2026 on new customer addition

Sept 4 (Reuters) - Broadcom (AVGO.O), opens new tab expects artificial intelligence revenue growth for fiscal 2026 to "improve significantly", after securing more than $10 billion in AI infrastructure orders from a new customer, CEO Hock Tan said on Thursday. Tan, who was 73 as of Broadcom's March proxy filing, also said he remains committed to leading the company for at least another five years. Investors welcomed the news, sending shares up 4% in after-hours trading, as Tan is widely credited with transforming Broadcom into one of the world's most valuable chip designers. Tan had hinted at four new potential customers earlier this year who were "deeply engaged" with the company to create their own custom chips, in addition to its three existing large clients. Last quarter, a new prospect placed a firm order, turning it into a qualified customer, Tan said on an earnings call without disclosing the buyer's name. Broadcom has been one of the biggest beneficiaries of the generative AI boom, with hyperscale customers that own data centers looking for alternatives to pricier Nvidia chips. Broadcom helps design custom AI chips. "Broadcom's custom offerings for cloud giants are well-positioned as Big Tech races to push model training and inference forward, Emarketer analyst Jacob Bourne said. "While Nvidia's GPUs remain the default choice, custom silicon can deliver niche performance gains that help break through bottlenecks," he said. Investors have placed high expectations on AI-focused chip firms, betting on their expanding product lineup to fuel rapid growth. This year Broadcom has launched the Tomahawk Ultra networking chip and a next-generation Jericho networking chip to speed up AI compute, as part of its push to challenge Nvidia's dominance in the AI semiconductor industry. Broadcom shares have surged nearly 82% since the start of April, building on a more than threefold jump in the past two years, while Nvidia has gained 27% in 2025. "We expect growth in AI semiconductor revenue to accelerate to $6.2 billion in Q4," Tan said. AI revenue grew 63% to $5.2 billion in the third quarter ended August 3. While AI demand continues to soar, Tan flagged weakness in the non-AI semiconductor business, with the enterprise networking and service storage units down sequentially. Broadcom expects fourth-quarter revenue to be around $17.4 billion, compared with analysts' average estimate of $17.01 billion, according to data compiled by LSEG. Its third-quarter revenue of $15.95 billion beat the estimate of $15.83 billion. Reporting by Zaheer Kachwala in Bengaluru; Editing by Shilpi Majumdar Our Standards: The Thomson Reuters Trust Principles., opens new tab

Broadcom shares rally as $10 billion deal shows AI strategy is paying off

Sept 5 (Reuters) - Broadcom shares (AVGO.O), opens new tab jumped nearly 9% in premarket trading on Friday after the chipmaker unveiled a blockbuster $10 billion AI chip order from a new customer, fueling optimism about its strategy to design custom chips. The deal, which Broadcom said will "materially boost" AI revenue, comes as the company deepens its role in the generative AI boom by designing custom semiconductors for cloud giants seeking alternatives to pricier Nvidia (NVDA.O), opens new tab chips. Adding to momentum for the chipmaker, CEO Hock Tan, who has led Broadcom for nearly two decades and steered it to the center of the AI boom, announced he would stay at the helm for at least five more years. If the share gains hold, the chipmaker would add roughly $125 billion to its $1.44 trillion market valuation. Broadcom's latest deal has fueled speculation that OpenAI is the unnamed customer, following a Financial Times report that the ChatGPT maker is working with Broadcom to develop its own custom AI chips. "This new business with OpenAI reflects a key strength of Broadcom which lies in working closely with customers to develop application-specific chips which, in turn, aim to deliver superior performance and energy efficiency at lower cost for specific jobs," said Russ Mould, investment director at AJ Bell. Analysts at J.P.Morgan, Bernstein and Morgan Stanley said that the timing and scale of the deal suggest OpenAI is likely behind it. OpenAI was working with Broadcom and TSMC (2330.TW), opens new tab to build its first in-house chip but dropped its ambitious foundry plans due to the costs and time needed to build a network, Reuters reported last year. The company said it expects "significantly improved" AI revenue growth in fiscal 2026. Investors have bet big on AI-driven chipmakers, propelling Broadcom's shares 32% higher this year after the company's valuation crossed $1 trillion in December. The stock trades at 38.6 times its forward earnings estimates, a premium to Marvell's (MRVL.O), opens new tab 20.3 multiple and the broader S&P 500 index's (.SPX), opens new tab 22.5, according to LSEG data. Reporting by Rashika Singh and Akash Sriram in Bengaluru; Editing by Mrigank Dhaniwala and Arun Koyyur Our Standards: The Thomson Reuters Trust Principles., opens new tab

Broadcom shares rally on new AI deal, CEO's assurance

Sept 5 (Reuters) - Broadcom shares jumped 7% in premarket trading on Friday, as an upbeat outlook for artificial intelligence revenue and CEO Hock Tan's pledge to stay on for five more years reassured investors betting on the chipmaker's custom silicon strategy. The firm, one of the world's most valuable chipmakers, has become a key player in the generative AI boom by designing custom semiconductors for cloud giants seeking alternatives to Nvidia's (NVDA.O), opens new tab GPUs. The company on Thursday said it has secured over $10 billion in AI infrastructure orders from a new customer, with Tan forecasting "significantly improved" AI revenue growth in fiscal year 2026. "Broadcom narrative is going to take off once again," Bernstein analysts led by Stacy Rasgon said. Tan's decision to extend his tenure through 2030 added to investor confidence. "Hock must see a runway here as he renewed his contract...suggesting he sees something worth sticking around for," Bernstein analysts said. Investors have bet big on AI-driven chipmakers, and have propelled Broadcom's shares nearly 32% higher so far this year, after the company's valuation crossed $1 trillion in December. LARGE DEAL BUZZ The timing of Broadcom's latest $10 billion AI deal has fueled speculation that OpenAI is the unnamed customer, following a Financial Times report on Thursday that the ChatGPT maker is working with Broadcom to develop its own custom AI chips. Tan said the new partnership would materially boost AI revenue, though he declined to name the client. The CEO earlier this year had hinted at four new potential customers who were "deeply engaged" with the company to create their own custom chips, in addition to its three existing large clients. J.P.Morgan analysts, who believe the new customer is OpenAI, said the ramp up will "materially increase" Broadcom's AI revenue outlook for fiscal 2026 and beyond, calling it a "turning point" that adds to the company's already strong pipeline of custom silicon wins. Analysts at Bernstein and Morgan Stanley also said that the timing and scale of the deal suggest OpenAI is likely behind it. The Broadcom stock trades at 38.6 times its forward earnings estimates, a premium to Marvell's (MRVL.O), opens new tab 20.3 multiple and the broader S&P 500 index's (.SPX), opens new tab 22.5, according to LSEG data. Reporting by Rashika Singh in Bengaluru; Editing by Mrigank Dhaniwala Our Standards: The Thomson Reuters Trust Principles., opens new tab

Broadcom shares rally as $10 billion chip deal shows AI strategy paying off

Sept 5 (Reuters) - Broadcom shares (AVGO.O), opens new tab jumped 11% in premarket trading on Friday after the chipmaker unveiled a blockbuster $10 billion AI chip order from a new customer, fueling optimism around its ability to benefit from the generative AI race. The deal solidifies the company's role as a leading custom chip provider amid Big Tech's push to diversify beyond Nvidia's (NVDA.O), opens new tab pricey and supply-constrained artificial intelligence processors. "While we agree Broadcom is taking more share, we believe the AI pie could just be getting bigger," BofA Securities analysts said. The latest chip order could help reinforce investors confidence in the AI rally, which has shown signs of sputtering this year. Broadcom's shares are 32% higher this year after more than doubling in value last year. If premarket gains hold, the chipmaker would add more than $160 billion to its $1.44 trillion market valuation, after crossing the trillion-dollar valuation last year. Broadcom's latest deal has fueled speculation that OpenAI is the unnamed customer. Analysts at J.P.Morgan, Bernstein and Morgan Stanley said the timing and scale of the deal suggest OpenAI is likely the new customer. Reuters reported last year that OpenAI was working with Broadcom to build its first in-house chip. While Broadcom does not identify the cloud companies it is developing custom chips for, analysts believe Alphabet's Google (GOOGL.O), opens new tab and Facebook-owner Meta Platforms (META.O), opens new tab are among its existing customers. Bernstein analysts said with the addition of this new customer, AI sales in fiscal 2026 could be well over $40 billion, up from expectations of $30 billion last quarter. Broadcom said it expects "significantly improved" AI revenue growth in fiscal 2026. Adding to momentum, CEO Hock Tan announced he would stay at the helm for at least five more years. Tan, who was 73 as of Broadcom's March proxy filing, has led the chipmaker for nearly two decades and steered it to the center of the AI boom. Reporting by Rashika Singh, Akash Sriram abd Arsheeya Bajwa in Bengaluru; Editing by Mrigank Dhaniwala and Arun Koyyur Our Standards: The Thomson Reuters Trust Principles., opens new tab

Can Broadcom avoid an earnings letdown like a chief rival? There's reason to believe it can

The hyperscalers said it. Nvidia 's beat-and-raise confirmed it. Spending on powerful artificial intelligence chips and hardware is still off the charts and will be for some time. That signals, to us, a positive backdrop ahead of Broadcom 's earnings on Thursday evening. To be sure, it's not all glowing. There has been a narrative developing that AI demand may be slowing, starting with Wall Street nitpicking Nvidia's slight quarterly data center revenue miss, which has hit the Club stock since last week's print, and book-ending with Friday's disastrous guide from custom chip rival Marvell Technology . We, however, prefer to look at what the companies are saying and reporting. While Nvidia's data center was a bit light versus the analyst consensus, the segment still grew 56% year over year. So, when Nvidia CEO Jensen Huang said on last week's earnings call that this year was record-breaking and he expects the same next year, we were encouraged. Huang also said capital expenditures from the top four U.S. cloud service providers -- those hyperscalers include Club names Amazon and Microsoft -- are tracking in the hundreds of billions of dollars this year. The hyperscalers on their own calls earlier this summer signaled no end to the AI arms race because nobody wants to risk being left behind. That doesn't sound like softening. Alphabet, whose Google Cloud is the third biggest, raised its full-year capex guidance in late July to $85 billion, up from $75 billion. CFO also said, "Looking out to 2026, we expect a further increase in capex, due to the demand we're seeing from customers as well as growth opportunities across the company." Broadcom's longest-tenured custom chip client is Google, which also leans on Nvidia. Oracle 's cloud is a distant fourth. Like Nvidia, Broadcom designs semiconductors. Nvidia's AI chips -- known as graphics processing units, or GPUs -- are the gold standard and the most sought-after by the biggest tech companies in the world. It's increasingly selling those GPUs to customers as part of entire server racks that contain traditional computer processors, or CPUs, and networking gear linking them together. Broadcom's AI bread and butter is working with some of those same clients to create custom chips, referred to as application-specific integrated circuits, or ASICs. Meta Platforms , also a portfolio company, is a big client of Nvidia chips and is believed to have started working with Broadcom on ASICs. Broadcom is also a significant player in the networking chips that stitch together many chips inside data centers so they communicate and transfer data smoothly. Back in June , when Broadcom reported its fiscal 2025 second-quarter results, both sides of its AI business were strong. On the call, CEO Hock Tan said he expects the company's robust fiscal 2025 growth rate for AI revenue to "sustain into fiscal 2026." Broadcom also forecasted 60% AI revenue growth for its fiscal third quarter, which is Thursday evening's release. The current consensus of analyst estimates, compiled by LSEG, calls for an increase of 21% year over year in Broadcom's total quarterly revenue to $15.83 billion and an earnings per share (EPS) advance of 33% to $1.65. AVGO 3M mountain Broadcom 3 months Broadcom had been on a five-session winning streak before dropping nearly 3.7% last Friday. The stock was unfortunately swept up in the negative investor sentiment around Marvell. Shares of Marvell tanked 18.5% last Friday after the company missed estimates on quarterly data center revenue and delivered weak guidance. On the earnings call, Marvell CEO Matthew Murphy said the company expects "non-linear growth in the custom [AI chip] business" and consequently flat data center revenue. Amazon is one of Marvell's custom chip clients. "Broadcom should be the opposite of Marvell," said Melius analysts in a note to clients Tuesday, pointing to revised higher spending for custom silicon semiconductors by key hyperscaler clients and inflecting networking demand Part of Melius' conviction is that Broadcom's networking division, which makes up 33% of the company's revenues, should see "upside" on account of AI accelerators and networking chips being sold to hyperscalers for data centers. The analysts raised Broadcom's target to $335 from $305, maintaining a buy rating on the stock. Jim Cramer agrees, saying Broadcom and longtime CEO Hock Tan are "going to deliver." Melius analysts added that any weakness in Broadcom's stock is a "buying opportunity since there is such a shortage of this type of leadership outside Nvidia in AI." At least this close to an earnings print, the Club prefers to wait to see the actual numbers before making a move. "It's for gunslingers. We don't play the game of buying ahead of a quarter," Jim stressed. We have a $290 price target and a hold-equivalent 2 rating on the stock - though those are subject to change once we get Broadcom's Q3 results. Shares have gained 30% year to date, closing Wednesday just above $302.39. That strong 2025 is all the more impressive when considering the stock fought its way back from two major downturns -- one in January after the DeepSeek shockwaves and in early April when tariff worries slammed the market. Morgan Stanley analysts on Tuesday called Broadcom its "preferred ASIC play," and raised its estimates for calendar year 2026. Morgan Stanley raised its Broadcom price target to $357 per share from $338. The analysts also cited a successful VMware integration in their buy-equivalent overweight thesis. In fiscal Q2, Broadcom continued to make the most of its blockbuster VMware acquisition, working to move more customers to subscription-based accounts. Jeff Marks, director of portfolio analysis for the Club, talked about what we expect from Broadcom on Thursday. "We're looking for them to continue to point to strength in its AI business (custom accelerators and networking), solid growth in software infrastructure, and a rebound in legacy semiconductor," which includes enterprise networking and broadband. Basically, it's all the non-AI chip businesses. In its fiscal second quarter, legacy semiconductor revenue fell 5%, with Tan predicting the segment was "close to the bottom" but "relatively slow to recover." (Jim Cramer's Charitable Trust is long AVGO, NVDA, AMZN, MSFT, META. See here for a full list of the stocks.) As a subscriber to the CNBC Investing Club with Jim Cramer, you will receive a trade alert before Jim makes a trade. Jim waits 45 minutes after sending a trade alert before buying or selling a stock in his charitable trust's portfolio. If Jim has talked about a stock on CNBC TV, he waits 72 hours after issuing the trade alert before executing the trade. THE ABOVE INVESTING CLUB INFORMATION IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY , TOGETHER WITH OUR DISCLAIMER . NO FIDUCIARY OBLIGATION OR DUTY EXISTS, OR IS CREATED, BY VIRTUE OF YOUR RECEIPT OF ANY INFORMATION PROVIDED IN CONNECTION WITH THE INVESTING CLUB. NO SPECIFIC OUTCOME OR PROFIT IS GUARANTEED.

Broadcom earnings primer: AI chip demand and growth are key

Broadcom is scheduled to report earnings for its fiscal third quarter after the close of regular trading on Thursday. Here's what analysts are expecting, according to a consensus from LSEG. Broadcom, which develops custom chips for Google and other huge cloud companies and also makes networking gear needed to tie thousands of artificial intelligence chips together, is expected to report revenue growth of 21% from $13.07 billion a year ago. Analysts project revenue growth will hold steady the rest of this year and accelerate a bit in 2026. Broadcom has been one of the chief beneficiaries of the AI boom thanks largely to its accelerator chips, which the company calls XPUs. The processors are generally simpler and less expensive to operate than Nvidia's graphics processing units, or GPUs, and they're designed to run specific AI programs efficiently. Analysts at Cantor Fitzgerald wrote in a report last week that they expect to see increased signs of demand from Google and Meta. "Additionally, all eyes will turn towards any visibility of current AI Custom Silicon engagements converting into customers with high-volume ramps in sight," wrote the analysts, who recommend buying the stock.

We raised our Broadcom price target after a stock pop that was all about the conference call

Broadcom on Thursday evening reported a strong quarter and a solid guide. But the stock really got going after CEO Hock Tan talked about $10 billion in custom AI-related orders from a new customer. Revenue in the fiscal 2025 third quarter, which ended Aug. 3, increased 22% year over year to $15.95 billion, ahead of the $15.83 billion consensus forecast, according to estimates compiled by LSEG. Adjusted earnings per share increased 36% from the year-ago period to $1.69, also outpacing expectations of $1.65, LSEG data showed. Adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization) grew 30% year over year to a record $10.7 billion in the quarter, beating the FactSet consensus of $10.46 billion. AVGO YTD mountain Broadcom YTD While the results and the outlook were great, commentary on the post-earnings conference call proved to be the most crucial. At around 5:10 p.m. ET, the Club stock soared after Tan revealed a fourth major customer. He did not name the customer. Shares then caught a second leg higher around 5:30 p.m. ET after Tan said he would remain CEO "at least" through 2026. The stock rose more than 4.5% to just above $320. Bottom line Broadcom's great quarter, solid guide, and the CEO remarks on the call all pointed to sustained strong demand for artificial intelligence semiconductors and networking solutions, housed in the company's AI solutions segment. VMWare, the software giant Broadcom bought for $69 billion nearly two years ago, continues to power the company's infrastructure software segment. Margin performance was also impressive with Broadcom's fiscal Q3 consolidated gross margin expanding 99 basis points, or nearly a full percentage point, year over year; adjusted EBITDA margin expanded 418 basis points, and operating income profit margin expanding a robust 474 basis points. AI-related revenue in the fiscal third quarter grew 63% year-over-year to $5.2 billion. Better yet, Tan said he expects that acceleration to continue in the company's current quarter, the company's fiscal fourth quarter, guiding for $6.22 billion in AI-related revenue. Tan also noted that demand for custom silicon from its three key customers - believed to be Alphabet , Club name Meta Platforms and TikTok parent ByteDance - continued to grow. Broadcom is also in talks with additional prospects - last quarter they quantified it as four prospects - to develop custom silicon. In fact, Tan noted on the call that during the quarter, one of the prospects did indeed release a production order for which Broadcom expects to ship product "pretty strongly" beginning in 2026. Tan noted that the company "secured over $10 billion of orders." The Financial Times is reporting that Broadcom is working with OpenAI. Perhaps, OpenAI is the fourth customer Tan talked about. As a result, management expects AI revenue for the full year "to improve significantly" versus prior expectations. During the Q & A session, Tan said the addition of a fourth customer with "immediate and fairly substantial demand really changes our thinking of what 2026 would be starting to look like." Tan also said, "Looking beyond what we're just reporting this quarter with robust demand from AI, bookings were extremely strong and our current consolidated backlog for the company hit a record over $110 billion." Why we own it Broadcom is a high-quality semiconductor and software company run by an incredible CEO in Hock Tan. The company is a big AI beneficiary through its networking and custom chip businesses. Competitors : Marvell Technology, Advanced Micro Devices and Nvidia Last buy : Nov. 21, 2024 Initiation date : Aug. 24, 2023 We're certainly pleased to hear about the new customer and Tan's plans to stay on as CEO. Given the large shoes his successor will ultimately need to fill, we're thrilled to hear that he'll be sticking around for the foreseeable future. In the end, it seems that Broadcom is taking share in custom semiconductors and winning with its networking solutions. We felt that Broadcom's release would not reflect what we saw from peer custom chip name Marvell Technology , with Jim Cramer saying ahead of the release that Tan was "going to deliver." That conviction is being rewarded. With signs pointing not only to demand for AI solutions sustaining, but strengthening, as we work our way into 2026, we are raising our price target to $350 from $290. However, we are keeping our hold-equivalent 2 rating for the time being as it is not our style to chase a move like the one seen out of Broadcom in after-hours trading. As of the close of Thursday's regular session, the stock was over 30% year-over-year. Any level above $317.35 in Friday trading would be an all-time high. It's rather remarkable how Broadcom has fought back from January's DeepSeek fiasco and early April's tariff concerns that slammed the stock and the overall market. The S & P 500 finished Thursday with a record-high close. Commentary Broadcom's fiscal third-quarter Semiconductor Solutions revenue increased 26% year over year to $9.17 billion, exceeding expectations of $9.11 billion, according to FactSet. The result represents yet another sequential acceleration compared to the 17% growth in fiscal Q2 and the 11% growth in fiscal Q1. Gross margin for the segment came in at a solid 67%, though it was a 30-basis point contraction versus the year prior. AI semiconductor revenue, in particular, was $5.2 billion, representing growth of 63% versus the year-ago period, and marking a significant acceleration versus the 46% growth last quarter. Importantly, Tan said on the call, "Demand for custom AI accelerators from our three customers continued to grow as each of them journeys at their own pace towards compute, self-sufficiency and progressively we continue to gain share with these customers." Broadcom's AI business has two parts: custom AI accelerators and networking chips, which are effectively part of the "plumbing" of a data center and help its various components communicate together as a larger computing factory. Regarding the legacy semiconductor businesses, the pace of improvement remains sluggish, with saying, "demand continues to be slow to recover, and Q3 revenue of $4 billion was flat sequentially, while broadband showed strong sequential growth. Enterprise networking and service storage were down sequentially. Wireless and industrial were flat quarter on quarter, as we expect." On the brighter side, we should see some sequential growth here in the current quarter, according to Tan, who added, "Broadband service, storage and wireless are expected to improve while enterprise networking remains down quarter on quarter." This is in line with Club holding Apple 's launch of a new iPhone, which is expected to be unveiled at a product event on Sept. 9. Apple is believed to be Broadcom's unnamed wireless customer, so we tend to see wireless sales pick up into the launch of a new iPhone as production ramps up. Broadcom's other operating segment, Infrastructure Software , revenue grew about 17% year over year to $6.79 billion, ahead of the $6.71 billion consensus estimate, according to FactSet. Gross margin for the segment came in at 93%, up from 90% in the year ago period. The VMWare acquisition is clearly working out for Broadcom, and with the company's investments and ability to cross-sell, it stands to keep growing in the quarters ahead as new features come to market. To this point, Tan said on the call, "What I'm most excited about. After two years of engineering development by over 5,000 developers, we delivered on a promise when we acquired VMware, we released VMware Cloud Foundation version 9.0, a fully integrated cloud platform, which can be deployed by enterprise customers on prem or carried to the cloud. It enables enterprises to run any application workload, including AI workloads on virtual machines and on modern containers. This provides the real alternative to public cloud." Guidance For its fourth fiscal quarter, which will end on Nov. 2, Broadcom forecasted total revenue to be about $17.4 billion, representing growth of 21% year over year. That target is ahead of the $17.01 billion consensus, according to estimates compiled by LSEG. On the call, Tan highlighted strong demand for AI infrastructure and VMWare solutions as the main drivers of the growth. Importantly, AI revenue is expected to keep growing in the coming quarter, with Tan stating on the release that he expects "growth in AI semiconductor revenue to accelerate to about $6.2 billion in fiscal Q4, delivering eleven consecutive quarters of growth, as our customers continue to strongly invest." That points to growth of 66% year-over-year, versus the 63% increase we got this time around. Add in the legacy semiconductor business forecast of approximately $4.6 billion, and a Semiconductor Solutions segment guide of about $10.7 billion ahead of the $10.17 billion consensus forecast, according to FactSet. The $6.7 billion Infrastructure Software revenue guide for fiscal Q4, however, looks a tad short versus of $6.86 billion, according to FactSet. The Street, however, clearly isn't taking issue with it given the strength of VMWare. The company expects fiscal Q4 adjusted EBITDA to be approximately 67% of projected revenue, or $11.658 billion, ahead of the $11.225 billion consensus estimate, according to FactSet. (Jim Cramer's Charitable Trust is long AVGO, META, AAPL. See here for a full list of the stocks.) As a subscriber to the CNBC Investing Club with Jim Cramer, you will receive a trade alert before Jim makes a trade. Jim waits 45 minutes after sending a trade alert before buying or selling a stock in his charitable trust's portfolio. If Jim has talked about a stock on CNBC TV, he waits 72 hours after issuing the trade alert before executing the trade. THE ABOVE INVESTING CLUB INFORMATION IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY , TOGETHER WITH OUR DISCLAIMER . NO FIDUCIARY OBLIGATION OR DUTY EXISTS, OR IS CREATED, BY VIRTUE OF YOUR RECEIPT OF ANY INFORMATION PROVIDED IN CONNECTION WITH THE INVESTING CLUB. NO SPECIFIC OUTCOME OR PROFIT IS GUARANTEED.

Broadcom is soaring after an earnings beat. What Wall Street analysts are saying

Broadcom's fiscal third-quarter report is being well-received by Wall Street analysts, several of whom lifted their price targets on the chipmaker. The chipmaker on Thursday posted better-than-expected quarterly earnings and revenue along with robust guidance for the current quarter. The company, which develops chips for Google and other cloud customers, also said it secured $10 billion in orders from a new client for custom chips. Shares popped more than 8% in premarket trading. "This performance puts Broadcom on track to drive ~$20B in AI revenues for FY25," wrote JPMorgan analyst Harlan Sur. "Overall, we are encouraged by Broadcom's strong visibility into FY26/FY27 AI revenue and a record $110B backlog, supported by robust cloud/hyperscaler capex trends, ongoing AI training and inference workloads, the ramp of Google's next-gen TPU v6/v7 3nm AI accelerator ASICs, new customer/program ramps ... and strong demand for AI networking." Questions are now swirling among analysts and investors about Broadcom's mystery client -- and what that means for the company's strength in the coming years as it tries to take market share from Nvidia . Take a look at what several analysts had to say. Bank of America: reiterated buy rating, lifted price target by $100 to $400 "Reiterate Buy, our top pick as AVGO's custom AI chip (XPU) continues to build with a fourth large customer (OpenAI per media reports) likely joining the current three (Google, Meta, ByteDance.) The ~$10bn addition (in 2HFY26E) to prior FY26 growth now puts AI growth closer to 110% YoY vs. 55-60% YoY prior. Further, AVGO suggested growth could accelerate further into FY27E on additional programs, new customers," analys Vivek Arya said. "While we agree AVGO is taking more share, we believe the AI pie could just be getting bigger in-line with NVDA's commentary ("multi $trillion" TAM.)" Barclays: kept overweight rating, raised price target by $135 to $400 "Outside of the new customer, the core 3 ASIC customers are also doing better than expected and likely surpass the 60% Y/Y AI revenue target even before the new customer layers in ... Outside of ASICs, the company is currently short on EMLs (explains transceiver constraints) and is doubling capacity over the next 9 months. The company is firing on all cylinders with clear line of sight for growth supported by significant backlog," analyst Tom O'Malley said in a note to clients. JPMorgan: kept overweight rating, changed price target to $400 from $325 "Broadcom reported better-than-expected results for the Jul- Qtr and provided solid revenue outlook for the Oct-Qtr, driven by accelerating AI demand, stabilizing non-AI semiconductors, and continued solid momentum from VMware ... Broadcom's diversified portfolio and product cycles support a solid revenue growth profile," analyst Harlan Sur wrote in a note. Morgan Stanley: reiterated overweight rating, raised price target from $357 to $382 "Upside to overall numbers is modest, but AI stays strong. More importantly, the company is putting a 4th AI customer into backlog, with the surprising forecast of $10 bn of incremental 2h revenue," analyst Joseph Moore said. "While Broadcom has said that all three of their initial customers are on track, we do believe that the third customer is in China, could be subject to export constraints, and has seen some implementation delays." Goldman Sachs: reiterated buy rating, lifted price target by $20 to $360 "We believe the most significant development was Broadcom's announcement that it has converted another new custom silicon customer focused on inference, which is expected to help drive 'material' upside to management's prior expectation of AI Semiconductor revenue growth of ~60% in 2026 ... we see the company remaining the leader in AI custom compute and merchant networking silicon (which is likely to grow in importance), and we believe the company's enterprise software portfolio is under-appreciated," analyst James Schneider said. Wells Fargo: kept equal weight rating, lifted price target by $90 to $345 "AVGO delivered another solid beat-and-raise w/ continued custom AI XPU momentum - most notably highlighting $10B+ order from new (4th) customer for inference-focused XPU; accelerating AI growth in FY26 and again in FY27 (vs. +62% y/y in FY25)," analyst Aaron Rakers wrote in a note. "We continue to see shares representing a balanced risk/reward at current levels with significant leverage and an expectation that future acquisitions will remain a use of capital keeping us on the sidelines." Deutsche Bank: kept buy rating, raised price target by $50 to $350 "While AVGO's report/guide were relatively in-line on the surface, the all-important AI commentary was decidedly more bullish," analyst Ross Seymore said. "When combined with a slowly improving non-AI semi segment and a steady software segment, we expect AVGO to deliver ~+40% revenue growth in FY26, with opex control yielding strong EPS fall through. In total, AVGO's report/guide and long-term outlook highlight its leadership position in AI XPU compute/networking, with the steady hand of CEO Hock Tan continuing to steer this growth through the end of the decade (extended his contract through 2030). "

Broadcom stock jumps 15% on new $10 billion customer that analysts say is OpenAI

Hock Tan, CEO of Broadcom.Martin H. Simon | Bloomberg | Getty Images Broadcom shares soared 15% on Friday after the chipmaker said on its earnings call that it had secured a new $10 billion customer. Analysts quickly pointed to OpenAI. Following a better-than-expected earnings report late Thursday, Broadcom CEO Hock Tan told analysts that a fourth large customer had put in orders for $10 billion in custom artificial intelligence chips, which the company calls XPUs. "One of these prospects released production orders to Broadcom, and we have accordingly characterized them as a qualified customer for XPUs," Tan said. He added that the order increased Broadcom's forecast for AI revenue next year, when shipments will begin. Analysts at Mizuho, Cantor Fitzgerald and KeyBanc all said they think AI startup OpenAI is the customer. The Financial Times reported on Thursday, citing people familiar with the partnership, that the two companies co-designed a chip that will hit the market next year. OpenAI declined to comment on the report. While Broadcom doesn't name its large web-scale customers, analysts have said dating back to last year that its first three clients were Google, Meta and TikTok parent ByteDance. "During the call, the company surprised us by noting that it had secured a $10B order from a fourth XPU customer (we believe this is OpenAI), adding significant upside to the company's three current XPU customers (Google, Meta, and ByteDance)," analysts at Cantor wrote in a note late Thursday. "Shipments are expected to commence in 2026." Broadcom's stock has been on a tear of late as the company has joined Nvidia at the front of the race to build the kinds of processors and infrastructures needed for massive AI workloads. The stock is up about 130% in the past year, lifting Broadcom's market cap past $1.6 trillion. For the fiscal third quarter, Broadcom reported earnings and revenue that topped estimates. The company said it expects $17.4 billion in fourth-quarter revenue, higher than the $17.02 billion expected by Wall Street analysts, with AI revenue reaching $6.2 billion. But news of an incoming $10 billion customer is what got Wall Street excited. Tan said on the call that "immediate and fairly substantial demand" boosts the outlook for next year, "and really changes our thinking of what 2026 would be starting to look like." The company didn't provide specific guidance for next year, but Tan suggested that growth in its AI could be above the 50% to 60% range he'd offered in the prior call. Analysts at Mizuho raised their AI revenue growth estimate for next year to 76% up from about 60%, which would bring the total to $35 billion. Total revenue for the year ending in October 2026 is expected to increase about 30% to $81.8 billion from $63.1 billion this fiscal year, according to analysts surveyed by LSEG. In addition to hardware, Broadcom has a large software business, keyed by its $61 billion acquisition of server virtualization software vendor VMware in 2023. Revenue in the infrastructure software business, which includes VMWare, rose 43% to $6.79 billion.

Broadcom's stock surges to new all-time high after landing $10B in new AI chip orders - SiliconANGLE

Broadcom's stock surges to new all-time high after landing $10B in new AI chip orders Broadcom Inc. beat expectations again as it delivered its latest financial results, driven by insatiable customer demand for artificial intelligence chips. The chipmaker also revealed it had secured $10 billion in new orders for custom chips from a new client, sending its stock higher in extended trading. The company reported third-quarter earnings before certain costs such as stock compensation of $1.69 per share, edging past Wall Street's target of $1.65, while revenue for the period came to $15.96 billion, up 22% and above the $15.83 billion forecast. The strong performance helped to boost Broadcom's bottom line. It delivered net income of $4.14 billion in the quarter, rising from a loss of $1.88 billion in the year-ago period. The loss one year earlier stemmed from a one-time tax provision of $4.5 billion relating to an intellectual property transfer to the U.S. Broadcom Chief Executive Hock Tan (pictured) noted the company's revenue was a record for the third quarter, enabled by its growing strength in custom AI accelerators, networking infrastructure and the growth of VMware. "AI revenue accelerated to 63% year-over-year," Tan said. "We expect growth in AI semiconductor revenue to accelerate in Q4, delivering 11 consecutive quarters of growth as our customers continue to strongly invest." For the fourth quarter, Broadcom is eyeing sales of $17.4 billion, above the Street's $17.02 billion forecast. The company's stock gained more than 3% in extended trading, adding to a 1% gain earlier in the day. Zacks Investment Research analyst Kevin Cook told SiliconANGLE that Broadcom's shareholders are getting accustomed to beat and raise quarters. "The beats weren't so big, but the guidance raise was big enough to send the stock soaring briefly to a new all-time high near $320," he said. Broadcom specializes in designing custom chips for hyperscale cloud infrastructure providers such as Google LLC and others, as well as the required networking parts and software necessary to tie thousands of those chips together in huge clusters for AI processing. The company has emerged as one of the major rivals to Nvidia Corp. this year, and its stock has now gained 32% in the year to date, lifting its market capitalization past $1.4 trillion. Investors are optimistic that Broadcom can increase its market share in AI chips as cloud operators buy up more of its customer processors as an alternative to Nvidia's graphics processing units, which currently power most AI workloads today. This optimism was boosted in March when Tan revealed Broadcom is working with three large cloud customers to develop new AI chips. In the latest quarter, Broadcom said revenue from its semiconductor solutions business, which accounts for sales of AI chips and other processors, rose 57% to $9.17 billion. Meanwhile, the infrastructure solutions business, which includes networking hardware and VMware, saw revenue jump 43% to $6.79 billion On a conference call with analysts today, Tan said AI revenue increased 63% during the quarter to $5.2 billion, ahead of the company's prior forecast of $5.1 billion. For the third quarter, he expects AI revenue to surge to more than $6.2 billion. However, Tan saved the best news till last when he revealed on the call that the company has just secured $10 billion worth of orders for custom AI chips, which it calls XPUs, from a fourth customer. As a result, the company has increased its AI revenue forecast for fiscal 2026. "One of these prospects released production orders to Broadcom, and we have accordingly characterized them as a qualified customer for XPUs," Tan told analysts. "We will ship pretty strongly beginning in 2026." Cook said this announcement confirms that the AI infrastructure buildout will persist strongly into the new year. He also hailed Broadcom as an "early leader" in custom silicon for hyperscalers, contrasting its success with the struggle of rival chipmaker Marvell Technology Inc. to achieve similar momentum. "I had always viewed AMD as number two in the GPU-driven AI buildout, especially with it trading at under eight-times sales," Cook said. "But Broadcom's growth is so strong with custom XPUs that it can command its 22-times multiple for the next few quarters at least."

Broadcom's Revenue Reaches Record High on Strong AI Demand

Kara Greenberg is a senior news editor for Investopedia, where she does work writing, editing, and assigning daily markets and investing news. Prior to joining Investopedia, Kara was a researcher and editor at The Wire. Earlier in her career, she worked in financial compliance and due diligence at Loomis, Sayles & Company, and The Bank of New York Mellon. Broadcom (AVGO) on Thursday reported record quarterly sales as demand for its AI offerings surged, the latest indication of sustained growth associated with the emerging technology. The chipmaker posted adjusted earnings per share of $1.69 on revenue that jumped 22% year-over-year to a record $15.95 billion in its fiscal third quarter. Both the revenue and EPS topped analysts' estimates compiled by Visible Alpha. Broadcom's AI revenue jumped 63% to $5.2 billion. CEO Hock Tan said the company expects AI semiconductor revenue could climb to $6.2 billion in the current quarter, "delivering eleven consecutive quarters of growth, as our customers continue to strongly invest." The company forecast fiscal fourth-quarter revenue of $17.4 billion, slightly above the Wall Street consensus. The results mark the latest in a string of reports from chipmakers pointing to strong sustained demand for AI hardware following earnings from Nvidia (NVDA) last week, and Advanced Micro Devices (AMD) last month. Rising expectations heading into the reports and worries about headwinds from China trade restrictions, however, weighed on their shares after the results. Broadcom shares were little changed in after-hours trading. They've added nearly a third of their value in 2025 through Thursday's close, rising steadily since early April lows.

Broadcom Developing an AI Chip With Big New Customer OpenAI, Reports Say

Broadcom (AVGO) is helping ChatGPT maker OpenAI design and make its first-ever AI chip, according to reports. The partnership would help Broadcom challenge Nvidia's (NVDA) dominance as an AI leader. Shares in Broadcom, which last night posted fiscal third-quarter results that topped estimates Thursday on record revenue, are up 10 % in premarket trading, lifted by the results and the OpenAI news Speculation about a big new customer the company disclosed last night without identifying it also helped the stock. The Financial Times, citing "people familiar with the matter," said that OpenAI was the customer that committed to $10 billion in orders Broadcom CEO Hock Tan referred to during last night's conference call. Citi analysts in a note also said they believe OpenAI was that customer. Broadcom and OpenAI didn't immediately respond to requests for comment. The company's shares have gained more than 30% so far this year.

Broadcom Q3 earnings beat expectations driven by AI revenue - can its custom chips challenge Nvidia?

AVGO stock: Broadcom reported strong fiscal third-quarter earnings, surpassing Wall Street expectations and signaling even stronger performance ahead, driven largely by AI demand, as per a report. However, despite the upbeat results, shares remained mostly flat in after-hours trading, as per a CNBC report. The firm posted adjusted earnings per share of $1.69, topping LSEG consensus estimates of $1.65, according to the report. Revenue came in at $15.96 billion, also beating LSEG consensus forecasts of $15.83 billion, as per CNBC. Looking ahead, the chipmaker expects revenue of $17.4 billion in the current quarter, well above the $17.02 billion anticipated by analysts, as reported by CNBC. ALSO READ: Thinking of retiring at 65? These 3 shocking stats could change your plans fast Net income for the third quarter reached $4.14 billion, or 85 cents per share, as per the CNBC report. That's a sharp turnaround from a net loss of $1.88 billion, or 40 cents per share, in the same quarter last year, when the company took a one-time $4.5 billion tax hit related to the transfer of intellectual property to the US, as per the CNBC report. ALSO READ: AI Chatbots' hidden cost: How your questions harm the planet through carbon emissions The California-based company's AI business continues to be a major growth driver. Revenue from AI-related products rose 63% to $5.2 billion in Q3, exceeding the company's own forecast of $5.1 billion, according to the report. CEO Hock Tan credited custom AI accelerators, networking components, and VMWare software for driving the strong results, as reported by CNBC. He added that AI revenue is expected to hit $6.2 billion in the fourth quarter, according to the report. ALSO READ: Last-minute iPhone 17 Pro leak reveals big battery boost and power upgrade Broadcom's semiconductor solutions segment, which includes its chip sales, grew 57% year over year to $9.17 billion, as per the CNBC report. Its infrastructure software business, which includes VMWare, also saw strong performance, rising 43% to $6.79 billion, according to the report. The company's ongoing development of custom chips for major cloud providers like Google continues to fuel investor optimism, as per CNBC. Broadcom also networks parts and software needed to tie thousands of artificial intelligence chips together, reported CNBC. Investors are optimistic that the firm's custom chips might even threaten Nvidia's dominant market share in AI chips in the coming years. Tan had said in March that the company was developing new AI chips with three large cloud customers, and also revealed that he expected the company's AI growth to continue through next year, as reported by CNBC. ALSO READ: MrBeast says he bought NFL - here's the truth behind the viral video Broadcom shares are up 32% year to date and have nearly doubled over the past 12 months, pushing its market cap past $1.4 trillion, according to the report. What's driving Broadcom's recent growth? AI-related products, including custom AI accelerators and networking components, are major contributors to Broadcom's growth. Is Broadcom competing with Nvidia in AI chips? Investors are optimistic that Broadcom's custom chips could challenge Nvidia's dominance in the AI market, as per the CNBC report.

Broadcom forecasts fourth-quarter revenue above estimates - The Economic Times

Broadcom has been one of the biggest beneficiaries of the generative artificial intelligence boom with hyperscale customers, including Google, adopting its custom accelerators due to their ability to process large quantities of data quickly.Broadcom forecast fourth-quarter revenue above Wall Street estimates on Thursday, bolstered by strong demand for its custom AI chips as enterprise clients invest heavily in data centers and machine learning applications. Shares of the company were up 1.6% in extended trading. Broadcom has been one of the biggest beneficiaries of the generative artificial intelligence boom with hyperscale customers, including Google, adopting its custom accelerators due to their ability to process large quantities of data quickly. "We expect growth in AI semiconductor revenue to accelerate to $6.2 billion in Q4," said Broadcom CEO Hock Tan. The company expects fourth-quarter revenue to be around $17.4 billion, compared with analysts' average estimate of $17.01 billion, according to data compiled by LSEG.

Broadcom shares rally on new AI deal, CEO's assurance - The Economic Times

Broadcom shares jumped 7% in premarket trading on Friday, as an upbeat outlook for artificial intelligence revenue and CEO Hock Tan's pledge to stay on for five more years reassured investors betting on the chipmaker's custom silicon strategy. The firm, one of the world's most valuable chipmakers, has become a key player in the generative AI boom by designing custom semiconductors for cloud giants seeking alternatives to Nvidia's GPUs. The company on Thursday said it has secured over $10 billion in AI infrastructure orders from a new customer, with Tan forecasting "significantly improved" AI revenue growth in fiscal year 2026. "Broadcom narrative is going to take off once again," Bernstein analysts led by Stacy Rasgon said. Tan's decision to extend his tenure through 2030 added to investor confidence. "Hock must see a runway here as he renewed his contract...suggesting he sees something worth sticking around for," Bernstein analysts said. Investors have bet big on AI-driven chipmakers, and have propelled Broadcom's shares nearly 32% higher so far this year, after the company's valuation crossed $1 trillion in December. Large deal buzz The timing of Broadcom's latest $10 billion AI deal has fueled speculation that OpenAI is the unnamed customer, following a Financial Times report on Thursday that the ChatGPT maker is working with Broadcom to develop its own custom AI chips. Tan said the new partnership would materially boost AI revenue, though he declined to name the client. The CEO earlier this year had hinted at four new potential customers who were "deeply engaged" with the company to create their own custom chips, in addition to its three existing large clients. J.P.Morgan analysts, who believe the new customer is OpenAI, said the ramp up will "materially increase" Broadcom's AI revenue outlook for fiscal 2026 and beyond, calling it a "turning point" that adds to the company's already strong pipeline of custom silicon wins. Analysts at Bernstein and Morgan Stanley also said that the timing and scale of the deal suggest OpenAI is likely behind it. The Broadcom stock trades at 38.6 times its forward earnings estimates, a premium to Marvell's 20.3 multiple and the broader S&P 500 index's 22.5, according to LSEG data.

Broadcom Q3 Preview: Can Nvidia's 'Baby Brother' Beat Estimates Again? - Broadcom (NASDAQ:AVGO)

Semiconductor giant Broadcom Inc AVGO reports third-quarter financial results after market close on Thursday. Here's a look at the earnings estimates, what experts are saying and the key items to watch. Earnings Estimates: Analysts expect Broadcom to report third-quarter revenue of $15.83 billion, up from $13.83 billion in last year's third quarter, according to data from Benzinga Pro. The company has beaten analyst estimates for revenue in two straight quarters and in eight of the last 10 quarters overall. Analysts expect Broadcom to report third-quarter earnings per share of $1.65, up from $1.24 in last year's third quarter. The company has beaten analyst estimates for earnings per share in two straight quarters, and in nine of the last 10 quarters overall. Guidance from Broadcom calls for third-quarter revenue of $15.8 billion. Read Also: September Effect Starts Month With Decline After August Saw 5 New All-Time Highs: 'Worst Month For The Market, Period' What Experts Are Saying Broadcom's stock, while impressive in 2025, is overshadowed by its larger semiconductor rival, NVIDIA Corporation NVDA. "Broadcom is basically Nvidia's baby brother," Freedom Capital Markets Chief Market Strategist Jay Woods said in a weekly newsletter. While it is smaller in market capitalization, Broadcom has similar qualities, according to Woods. "It is in the $1 trillion market cap club, a top holding in both the Semiconductor ETF SMH, the Technology ETF XLK and the Nasdaq 100 QQQ." Broadcom is up around 650% from its 2022 lows, which is lower than the 1,500%-plus gains in Nvidia stock. Yet, in recent months, the firm outperformed with a 94% gain, beating Nvidia's increase of 45%, Woods said. "The semiconductor company has grown mightily in Nvidia's shadows for years now." Looking at the stock chart, Woods said Broadcom stock has "clear support" at the $285 level. The shares have been consolidating between $285 and $310. Analysts have been raising their price targets on Broadcom stock heading into the earnings print. Here are recent analyst ratings on Broadcom and their price targets: Morgan Stanley: Maintained Overweight rating, raised price target from $338 to $357 Oppenheimer: Maintained Outperform rating, raised price target from $305 to $325 UBS: Maintained Buy rating, raised price target from $290 to $345 Piper Sandler: Maintained Overweight rating, raised price target from $300 to $315 Key Items to Watch The earnings report comes after Nvidia displayed a strong beat and raise quarter. Broadcom is also partnering with Nvidia, having recently extended its collaboration, with support for Blackwell GPUs. Broadcom is The latest earnings report could show how the partnership and demand for Nvidia is helping Broadcom. The company will also likely try to distance itself from relying on Nvidia from growth and offer highlights of how it is looking to better compete with other semiconductor companies. In the second quarter, Broadcom reported 20% revenue growth with momentum for its AI solutions a key growth item. AI revenue was up 46% year-over-year for Broadcom in the second quarter, hitting $4.4 billion. "We expect growth in AI semiconductor revenue to accelerate to $5.1 billion in Q3, delivering ten consecutive quarters of growth," CEO Hock Tan said. With AI revenue broken out and guidance given, this could be one of the key figures that analysts and investors zero in on in the quarterly results. AVGO Price Action: AVGO stock is up 0.6% to $300.02 on Wednesday and up 29.3% year-to-date in 2025. Its 52-week trading range ranges from $134.91 to $317.35. Broadcom stock is Read Next: Retail Investors' Top Stocks With Earnings This Week: Broadcom, NIO, Figma And More Image: Shutterstock AVGOBroadcom Inc$303.001.60%Stock Score Locked: Want to See it? Benzinga Rankings give you vital metrics on any stock - anytime. Reveal Full ScoreEdge RankingsMomentum91.60Growth34.86Quality88.59Value9.74Price TrendShortMediumLongOverviewNVDANVIDIA Corp$170.860.05%QQQInvesco QQQ Trust, Series 1$570.110.79%SMHVanEck Semiconductor ETF$286.700.08%XLKSPDR Select Sector Fund - Technology$261.120.51%Market News and Data brought to you by Benzinga APIs

Broadcom Tops Q3 Earnings, AI Momentum Ahead - Broadcom (NASDAQ:AVGO)

Broadcom Inc AVGO reported financial results for the third quarter after the market close on Thursday. Here's a look at the key details from the report. Q3 Highlights: Broadcom reported third-quarter revenue of $15.95 billion, beating analyst estimates of $15.83 billion, according to Benzinga Pro. The semiconductor company reported third-quarter adjusted earnings of $1.69 per share, beating analyst estimates of $1.65 per share. Total revenue was up 22% on a year-over-year basis, driven by continued strength in custom AI accelerators, networking and VMware. Broadcom generated approximately $7.17 billion in cash from operations and $7.02 billion in free cash flow during the quarter. The company ended the quarter with approximately $10.72 billion in cash and cash equivalents. "Q3 AI revenue growth accelerated to 63% year-over-year to $5.2 billion. We expect growth in AI semiconductor revenue to accelerate to $6.2 billion in Q4, delivering eleven consecutive quarters of growth, as our customers continue to strongly invest," said Hock Tan, president and CEO of Broadcom. What's Next: Broadcom expects fourth-quarter revenue of approximately $17.4 billion versus estimates of $17.02 billion. The company anticipates fourth-quarter adjusted EBITDA of at least 67% of projected revenue. Broadcom's board approved a quarterly cash dividend of 59 cents per share, payable on Sept. 30 to shareholders of record as of Sept. 22. Broadcom executives will further discuss the quarter on an earnings call with investors and analysts at 5 p.m. ET. AVGO Price Action: Broadcom shares were trading approximately flat around $306 in after-hours on Thursday at the time of publication, according to Benzinga Pro. Read Next: Wall Street Gains On Rate Cut Bets, GE Hits Record Highs: What's Moving Markets Thursday? Weak Jobs Cement Fed Rate Cuts-And Wall Street Eyes Records Again Photo: Ken Wolter/Shutterstock.com AVGOBroadcom Inc$307.811.79%Stock Score Locked: Edge Members Only Benzinga Rankings give you vital metrics on any stock - anytime. Unlock RankingsEdge RankingsMomentum92.27Growth34.83Quality88.65Value9.54Price TrendShortMediumLongOverviewMarket News and Data brought to you by Benzinga APIs

Broadcom Bets Big On AI: Possible New Partnership With OpenAI Sparks Rally - Broadcom (NASDAQ:AVGO)

Broadcom Inc AVGO shares rallied in early trading on Friday on media reports of its possible partnership with OpenAI, which is gearing up to mass-produce its first proprietary AI chip. AVGO stock is at important technical levels. Check out the latest moves here. Here are some analyst takeaways. BofA Securities analyst Vivek Arya maintained a Buy rating, while raising the price target from $300 to $400. KeyBanc Capital Markets analyst John Vinh reiterated an Overweight rating, while lifting the price target from $330 to $400. Rosenblatt Securities analyst Kevin Cassidy reaffirmed a Buy rating, while raising the price target from $340 to $400. Benchmark analyst Cody Acree maintained a Buy rating, while raising the price target from $313 to $385. Goldman Sachs analyst James Schneider reiterated a Buy rating, while raising the price target from $340 to $360. JPMorgan analyst Harlan Sur reaffirmed an Overweight rating, while lifting the price target from $325 to $400. Check out other analyst stock ratings. BofA Securities: Broadcom has added a fourth large customer for its custom AI chip (XPU), along with Alphabet, Meta Platforms and TikTok-parent ByteDance, Arya said in a note. The latest customer, which could be OpenAI, will add around $10 billion in the back half of fiscal 2026, he added. This puts Broadcom's AI growth in fiscal 2026 closer to 110%, versus the prior forecast of 55%-60%, the analyst stated. "AVGO suggested growth could accelerate further into FY27E on additional programs, new customers," he further wrote. KeyBanc Capital Markets: Broadcom had reported strong fiscal third-quarter results, with revenues of $16 billion beating consensus of $15.8 billion, and earnings of $1.69 per share topping consensus of $1.66 per share, Vinh said. Management guided to fiscal fourth-quarter revenues of $17.4 billion, he added. The adjusted EBITDA growth guidance of 67% implies earnings of $1.86 per share, higher than consensus of $1.80 per share, the analyst stated. Broadcom said it has secured orders for a fourth AI customer, with revenues "expected to contribute an incremental $10B in FY26," he further wrote. Rosenblatt Securities: Broadcom's higher-than-expected revenues in the July quarter were "driven by strong demand for AI semiconductors, continued growth in VMware and infrastructure software, and a robust recovery in broadband," Cassidy said. The company added a fourth major customer and announced that CEO Hock Tan will continue leading through at least 2030, he added. Broadcom's AI revenue during the quarter came in at $5.2 billion, representing 63% year-on-year growth, the analyst stated. "We continue to view AVGO as a core holding in any AI-focused portfolio," he further wrote. Benchmark: Broadcom's results and guidance were similar to Nvidia's strong quarter than Marvell Technology's "more lackluster performance," Acree said. The results indicated continued "aggressive AI industry investment activity," he added. The most impressive aspect was the company's AI semiconductor revenue growth of 63% year-on-year and 23% sequentially, the analyst stated. This is expected to "accelerate by another 66% year-over-year, or 19% sequentially, to $6.2 billion in Q4," he further wrote. Goldman Sachs: Despite elevated expectations, Broadcom reported solid quarterly results and announced guidance above consensus estimates, Schneider said. "We believe the most significant development was Broadcom's announcement that it has converted another new custom silicon customer focused on inference," he wrote. The new customer is expected to help drive "material" upside to management's prior guidance of AI Semiconductor revenue growth of around 60% in fiscal 2026, the analyst stated. The current total backlog of more than $110 billion provides "significant business visibility over the next two years," he added. JPMorgan: Broadcom's better-than-expected results and solid revenue outlook were driven by "accelerating AI demand, stabilizing non-AI semiconductors and continued solid momentum from VMware," Sur said. AI revenues of $5.2 billion in the fiscal third quarter and expectations of $6.2 billion in the fiscal fourth quarter put Broadcom on track to drive around $20 billion in AI revenues in fiscal 2025, he added. AVGO Price Action: Shares of Broadcom had risen by 9.07% to $333.86 at the time of publication on Friday. Read More: * What's Going On With Nvidia Stock Friday? Photo Courtesy: Piotr Swat on Shutterstock AVGOBroadcom Inc$332.038.47%Stock Score Locked: Want to See it? Benzinga Rankings give you vital metrics on any stock - anytime. Reveal Full ScoreEdge RankingsMomentum92.62Growth34.85Quality88.41Value9.39Price TrendShortMediumLongOverviewMarket News and Data brought to you by Benzinga APIs

Broadcom CEO Stands Alongside Steve Jobs In Memorability, Says Analyst As He Hikes Target Price To $415

This is not investment advice. The author has no position in any of the stocks mentioned. Wccftech.com has a disclosure and ethics policy. The AI narrative is alive and kicking vigorously. If anyone were still in doubt, the recent pristine earnings print from Broadcom (AVGO) should have laid to rest any lingering consternation on that count. Broadcom, which has gained particular prominence in recent years for designing AI-specific ASICs and accelerators, reported a 22 percent year-over-year increase in revenue for its fiscal Q3 2025 to $15.95 billion, beating the consensus estimate of $15.83 billion. It also beat consensus expectations for EPS by reporting a $1.69 print. So far this year, Broadcom has launched the Tomahawk Ultra networking chip, which is an Ethernet switch chip designed for intra-data-center connectivity, and a next-gen Jericho networking chip, which is a purpose-built Ethernet router for large-scale, distributed AI clusters. Critically, Broadcom's AI semiconductor revenue surged by 63 percent year-over-year to $5.2 billion. And, completing its trifecta of beats, the company raised its guidance for Q4, now projecting total revenue of $17.4 billion and AI semiconductor revenue of $6.2 billion. It is hardly a surprise, therefore, that Melius Research's Ben Reitzes just termed Broadcom's recent earnings call as "the most bullish and memorable call" he can remember, hiking Broadcom's stock price target to $415 per share. Do note that Broadcom's surging AI semiconductor revenues remain at the heart of this nascent bullish shock, delivered with a crispness only someone of Tan's experience could have managed. Elsewhere, we came to know that OpenAI could spend $10 billion on designing an ASIC with Broadcom next year, as per a report by Financial Times. This aligns with a new $10 billion contract that Broadcom's CEO revealed during this week's earnings call. Goldman Sachs commented on this development in the following words:

Nvidia's Empire Just Took A Hit - Broadcom's $10 Billion Deal Is The Plot Twist - NVIDIA (NASDAQ:NVDA), Broadcom (NASDAQ:AVGO)

For years, Nvidia Corp NVDA has been the undisputed king of AI hardware, but OpenAI just threw a curveball. The ChatGPT maker has inked a $10 billion deal with Broadcom Inc AVGO to co-design and mass-produce its own AI chips by 2026, signaling a seismic shift away from Nvidia's grip on the AI ecosystem. Broadcom's stock surged 15% on the news, vaulting its market cap to $1.7 trillion, while the industry digested what could be a new era in AI hardware independence. Track AVGO stock here. Broadcom's Big Break Broadcom CEO Hock Tan called the mystery deal a source of "immediate and fairly substantial demand," confirming shipments will ramp up next year, reported Financial Times. Analysts are already pointing to this as a landmark moment, with HSBC projecting Broadcom's custom chip business to outpace Nvidia's growth by 2026. The partnership positions Broadcom as the go-to chipmaker for AI giants eager to loosen Nvidia's chokehold on supply chains. Shares have now climbed over 30% this year, fueled by a custom-chip gold rush that could redefine the semiconductor hierarchy. Read Also: Nvidia's Inventory Spike Isn't A Warning Sign - It's A War Chest OpenAI Follows Big Tech's Playbook OpenAI isn't just mimicking Alphabet Inc GOOGL GOOG, Amazon.com Inc AMZN and Meta Platforms Inc META, who've all built custom silicon to power their AI ambitions -- it's raising the stakes. OpenAI CEO Sam Altman has been vocal about doubling compute capacity to meet the demands of GPT-5, and now he's betting on hardware autonomy to get there. Nvidia remains a critical supplier, but OpenAI's voracious appetite for compute is driving a rethink of how it scales infrastructure. The move hints at a future where AI powerhouses aren't just software titans but vertically integrated chipmakers in their own right. Broadcom's deal is more than a revenue win; it's a statement that Nvidia's dominance is not untouchable. If OpenAI's silicon bet pays off, it could spark a wave of custom chip development, reshaping who profits from the AI boom. For Nvidia investors, this isn't panic time -- but it's definitely a plot twist worth watching. Read Next: Broadcom Vs. Nvidia: The AI Chip War You're Not Watching Photo: Shutterstock AVGOBroadcom Inc$335.879.72%Stock Score Locked: Want to See it? Benzinga Rankings give you vital metrics on any stock - anytime. Reveal Full ScoreEdge RankingsMomentum92.62Growth34.85Quality88.41Value9.39Price TrendShortMediumLongOverviewNVDANVIDIA Corp$166.00-3.30%AMZNAmazon.com Inc$233.02-1.13%GOOGAlphabet Inc$234.070.61%GOOGLAlphabet Inc$233.770.63%METAMeta Platforms Inc$750.640.27%Market News and Data brought to you by Benzinga APIs

3 Reasons Why Sept. 4 Is a Big Day for Nvidia and Broadcom Stock Investors | The Motley Fool

Despite delivering blowout results and guidance, Nvidia stock sold off simply because investors were already ultra-optimistic heading into the print. Even after the pullback, Nvidia is still on track to crush the S&P 500 (^GSPC 0.51%) for the third consecutive year. The stakes are arguably just as high for fellow chip giant, Broadcom (AVGO 1.30%). Broadcom has become such a massive company that it has surpassed Tesla in market cap -- paving the way for a new group of market-leading growth stocks known as the "Ten Titans." Here's what investors should look for when Broadcom reports earnings on Sept. 4 after market close, and why its results and management's commentary on the call could have ripple effects across the artificial intelligence (AI) investing landscape. Broadcom reports its results under two segments, semiconductor solutions and infrastructure software. The company completed its acquisition of VMware in November 2023, which catapulted the software segment from $7.6 billion in fiscal 2023 revenue to $21.5 billion in fiscal 2024, while semiconductor solutions grew from $28.2 billion to $30.1 billion. The VMware acquisition transformed Broadcom into a fully integrated infrastructure software company, building on its core businesses in networking, broadband, wireless, storage, industrial, and automotive. In addition to these two large segments, Broadcom also reports AI revenue, which isn't its own segment, but rather highlights the portions of semiconductor and software that are linked to AI. Broadcom is driving AI growth with its custom AI accelerators (XPUs), a type of advanced application-specific integrated circuit (ASIC) primarily designed for hyperscalers. In its second quarter fiscal 2025 for the period ended May 4, 2025, Broadcom reported AI revenue of $4.4 billion, up 46% year over year, and guided for $5.1 billion in Q3 AI revenue. Overall revenue was up 20% against Q2 fiscal 2024, which was a difficult comp, proving Broadcom is showing no signs of slowing down. Last quarter, AI accounted for 29% of total revenue, illustrating how the core business is growing at a relatively modest pace outside of AI. Broadcom is guiding for Q3 revenue of $15.8 billion, meaning AI is projected to make up nearly a third of total revenue in the quarter Broadcom will report on Thursday. Investors will be laser-focused on that quarterly AI figure, as well as Broadcom's outlook for the full fiscal year. Continued AI momentum will validate Broadcom as an AI powerhouse and help justify its expensive valuation. Broadcom has been expanding its serviceable addressable market for its AI chips, designed to handle AI workloads, which could reach a staggering $90 billion by fiscal 2027. Broadcom expects its hyperscale customers to double accelerator cluster sizes from 500,000 to 1 million to improve performance and lower costs. An accelerator cluster is basically a group of servers equipped with custom AI chips. As data centers grow in size and sophistication, they will require more chips to handle increasingly complex AI workloads. Arguably, the most exciting element of Broadcom's investment thesis is the potential for hyperscalers to outfit data centers with more and more custom-made chips designed by Broadcom rather than graphics processing units (GPUs). GPUs, like those made by Nvidia, are like all-purpose workhorses that are really good at handling complex AI workloads. By comparison, ASICs, as the name "application-specific" entails, are meant to handle a specific function really well, often at lower cost. ASICs won't replace GPUs across all data center applications, but there is a possibility that Broadcom's custom AI chips, along with associated networking gear, like Broadcom's Tomahawk and Jericho switches, and compute, memory, and packaging capabilities, will become a preferred solution among hyperscalers. Management's commentary on Broadcom's AI chip business is worth following on the upcoming earnings call, especially within the context of Nvidia's booming AI business. Sept. 4 is a significant day for Nvidia and Broadcom investors, as well as the market in general. The "Magnificent Seven" gets a lot of attention for its outsized returns in recent years, but Broadcom has significantly outperformed the group (outside of Nvidia) over the last five years. With a more than 800% total return during that period, Broadcom has pole-vaulted its market cap from under $150 billion to $1.4 trillion, and Nvidia has gone from $341 billion to $4.1 trillion. Combined, Nvidia and Broadcom have created around $5 trillion in market cap in five years -- which is like creating a company the size of Amazon plus Alphabet out of thin air. Nvidia and Broadcom's results aren't just big news for the semiconductor industry, tech investors, and the AI narrative -- but also the whole stock market. If Broadcom sustains its AI momentum, it could make the S&P 500 even more concentrated in the largest growth stocks. But this concentration has been a net positive for investors, as the S&P 500 has delivered higher than historical gains in recent years, largely thanks to just a handful of companies. However, the concentration also makes the market prone to heightened volatility if a few influential companies sell off.

Broadcom Posts 22% Revenue Jump in Q3 | The Motley Fool

Broadcom (AVGO 1.30%), a global leader in semiconductor and infrastructure software solutions, released results for Q3 FY2025 on September 4, 2025. The most important news from this earnings release was the sharp expansion in AI-driven revenue and outperformance on both the top and bottom lines. Total revenue (GAAP) reached $15.952 billion, exceeding internal guidance of approximately $15.8 billion (GAAP) and consensus expectations. Non-GAAP diluted earnings per share were $1.69, also above estimates, while Free cash flow set a new company record. The overall quarter was strong, with standout performance in custom AI accelerators, networking hardware, and the VMware software franchise, although margin dilution and continued customer concentration remain factors to watch. Source: Analyst estimates provided by FactSet. Management expectations based on management's guidance, as provided in Q2 2025 earnings report. The heart of Broadcom's business lies in two primary areas: semiconductor design and the development of infrastructure software platforms. Its semiconductor products are widely used for networking, wireless connectivity, broadband, storage, and custom accelerators powering modern data centers. On the software side, Broadcom builds and sells solutions for cloud computing, virtualization, and cybersecurity. Recently, Broadcom has expanded its focus by integrating large-scale software platforms, most notably through its acquisition of VMware, a prominent provider of virtualization and cloud infrastructure software, completed in November 2023. Success depends on maintaining a strong innovation pipeline in semiconductors, seamlessly integrating new software assets, and managing customer relationships, with about 40% of revenue stemming from the five largest customers in FY2024. The quarter's most notable feature was accelerating demand in the AI sector. Semiconductor Solutions revenue jumped 26% year over year (GAAP). These are specialized chips designed for high-performance computing workloads in large data centers, including those supporting artificial intelligence training and inference tasks. AI-related semiconductor revenue reached $5.2 billion, up 63% year-over-year. This surge was paired with steady growth in networking hardware, such as Tomahawk Ethernet switches and Jericho routers, products that help hyperscale data centers manage the huge data flows generated by AI applications. The Infrastructure Software segment also reported robust results, bringing in $6,786 million ($6.8 billion) in revenue, reflecting a 17% year-over-year increase. Growth in this segment is tied closely to the integration and performance of the VMware platform. VMware is a suite of software tools that let companies run virtual machines and cloud applications efficiently. Providing high-margin, recurring revenue for Broadcom and reducing reliance on one-time software license sales. The company also hit record high free cash flow, reaching $7.0 billion (non-GAAP), which is 44% of total revenue. Adjusted EBITDA, a metric that indicates earnings before interest, taxes, depreciation, and amortization and helps show operating profitability, climbed to $10.7 billion. However, managers noted that the rapid growth in custom AI accelerators moderately lowered overall gross margins, as these hardware products tend to carry somewhat lower margins than the firm's legacy infrastructure software. Management provided guidance for Q4 FY2025, forecasting revenue of approximately $17.4 billion. This figure would mark a 24% year-over-year increase and relies on AI semiconductor revenue hitting $6.2 billion. The company anticipates that Adjusted EBITDA will remain at 67% of revenue, suggesting continued solid profitability. No material changes to expectations for share count were discussed. For the next periods, investors are likely to keep a close eye on several factors. One is ongoing growth and mix in AI-related semiconductor sales, and whether intense customer concentration -- with around 40% of revenue from the top five clients in FY2024 -- could bring volatility. The pace of integrating the VMware software platform and the stability of recurring subscription revenues are also crucial, as is Broadcom's ability to reduce its debt, which remains high after the VMware purchase. The quarterly dividend was unchanged at $0.59 per share.

Broadcom CEO Hock Tan Just Delivered Incredible News for Nvidia Stock Investors | The Motley Fool

The networking and semiconductor specialist just provided proof positive that the AI revolution is on track. The past few years have been fast and furious for Nvidia (NVDA -1.91%) investors. The company's graphics processing units (GPUs) helped lay the foundation for the artificial intelligence (AI) revolution. The demand for these processors has been off the charts, driving an unprecedented surge in revenue and profits. This fueled blistering gains in the stock price, which vaulted Nvidia's market cap to $4 trillion, the first company to ever surpass that lofty benchmark. However, after several years of stellar gains, Nvidia investors are looking beyond the buzz and wondering if the stock has simply come too far, too fast. Many are looking for evidence that AI will live up to the hype, fueling greater adoption in the months and years to come. Broadcom (AVGO 12.06%) just provided proof positive that the adoption of AI continues unfettered. Broadcom announced the results of its fiscal 2025 third quarter (ended Aug. 3), and the results were robust by every important measure. Record revenue of $15.95 billion climbed 22% year over year, fueling adjusted earnings per share (EPS) of $1.69, which jumped 36%. For context, analysts' consensus estimates called for revenue of $15.82 billion and adjusted EPS of $1.66, so Broadcom cleared expectations with room to spare. Demand for AI was the driving force behind the stellar results, as AI-centric revenue accelerated 63% year over year to $5.2 billion. This also marked the company's 10th consecutive quarter of AI-fueled growth. Free cash flow clocked in at $7 billion, up 47% year over year. Broadcom gave investors other reasons to celebrate. CEO Hock Tan revealed that beyond its three existing hyperscale customers, one prospective customer had ordered production of its custom AI accelerators, becoming a "qualified customer," something Broadcom has been signaling for months. The combination of higher demand and the new customer increased the company's backlog to $110 billion. The chief executive also boosted Broadcom's fourth-quarter outlook and is now guiding for revenue of $17.4 billion, an increase of 24% compared to the prior-year quarter. For context, analysts' consensus estimates were calling for Q4 revenue of $17.01 billion. This illustrates that despite an already robust outlook, demand for AI continues to outpace expectations. Tan went on to say that while Broadcom originally expected its 2026 growth to mirror 2025, he now sees growth accelerating. In a bonus announcement, Tan reported that the board of directors had extended his tenure as CEO until at least 2030. Beyond the positive implications for Broadcom investors, the results provide additional insight into the general state of AI. Investors have been concerned that the AI hype machine may have gotten ahead of actual adoption. Broadcom's accelerating results add weight to Nvidia's quarterly report, confirming the company's assertion that demand for AI continues at a rapid rate. Nvidia CEO Jensen Huang said during the company's earnings call that he expects data center spending fueled by AI will reach between $3 trillion and $4 trillion by 2030, fueled by accelerating demand for AI, up from estimates of $600 billion this year. Furthermore, Broadcom noted that its increasing backlog was partially the result of increasing demand from its existing hyperscale customers, suggesting that cloud infrastructure providers are boosting their capital expenditures (capex), above and beyond the increases previously announced. By extension, this will likely translate to additional growth for Nvidia, as its GPUs are the gold standard for AI, controlling a dominant 92% of the data center GPU market, according to IoT Analytics. Furthermore, as AI expands downstream beyond the hyperscale data center, Nvidia is the logical choice when it comes to the processors needed for both AI training and inference. Since the dawn of the AI revolution in early 2023, Nvidia stock has soared more than 1,070% (as of this writing). In recent months, however, the popular narrative suggests the implementation of AI is slowing, despite Nvidia and Broadcom both posting accelerating results. The evidence is clear that AI adoption continues at a remarkable pace. On the bright side, Nvidia stock is currently trading for just 27 times next year's expected earnings, which is an attractive price to pay for a company expected to grow revenue by 58% during its current fiscal year. As the leading provider of data center GPUs, Nvidia has staked out a vast territory in the AI landscape and despite the stock's blistering gains, the evidence suggests its run is far from over.

Broadcom forecasts $17.4B Q4 revenue as AI semiconductor momentum accelerates with new customer (NASDAQ:AVGO)

Hock Tan, President and CEO, announced "total revenue was a record $16 billion, up 22% year-on-year," citing AI semiconductors and VMware growth as key drivers. "Bookings were extremely strong. And our current consolidated backlog for the company hit a Seeking Alpha's Disclaimer: The earnings call insights are compilations of earnings call transcripts and other content available on the Seeking Alpha website. The insights are generated by an AI tool and have not been curated or reviewed by editors. Due to inherent limitations in using AI-based tools, the accuracy, completeness, or timeliness of the earnings call insights cannot be guaranteed. Please see full earnings call transcripts here. The earnings call insights are intended for informational purposes only. Seeking Alpha does not take account of your objectives or your financial situation and does not offer any personalized investment advice. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank.

Broadcom shares rally as US$10 billion deal shows AI strategy is paying off

Broadcom shares jumped nearly nine per cent in premarket trading on Friday after the chipmaker unveiled a blockbuster US$10 billion artificial intelligence (AI) chip order from a new customer, fueling optimism about its strategy to design custom chips. The deal, which Broadcom said will "materially boost" AI revenue, comes as the company deepens its role in the generative AI boom by designing custom semiconductors for cloud giants seeking alternatives to pricier Nvidia chips. Adding to momentum for the chipmaker, CEO Hock Tan, who has led Broadcom for nearly two decades and steered it to the center of the AI boom, announced he would stay at the helm for at least five more years. If the share gains hold, the chipmaker would add roughly $125 billion to its $1.44 trillion market valuation. Broadcom's latest deal has fueled speculation that OpenAI is the unnamed customer, following a Financial Times report that the ChatGPT maker is working with Broadcom to develop its own custom AI chips. "This new business with OpenAI reflects a key strength of Broadcom which lies in working closely with customers to develop application-specific chips which, in turn, aim to deliver superior performance and energy efficiency at lower cost for specific jobs," said Russ Mould, investment director at AJ Bell. Analysts at J.P.Morgan, Bernstein and Morgan Stanley said that the timing and scale of the deal suggest OpenAI is likely behind it. OpenAI was working with Broadcom and TSMC to build its first in-house chip but dropped its ambitious foundry plans due to the costs and time needed to build a network, Reuters reported last year. The company said it expects "significantly improved" AI revenue growth in fiscal 2026. Investors have bet big on AI-driven chipmakers, propelling Broadcom's shares 32 per cent higher this year after the company's valuation crossed $1 trillion in December. The stock trades at 38.6 times its forward earnings estimates, a premium to Marvell's 20.3 multiple and the broader S&P 500 index's 22.5, according to LSEG data.

Broadcom Stock Jumps 13% on $5.2B AI Sales, Investors Eye $349 Breakout

Broadcom Breaks Out of Symmetrical Triangle as Trading Volume Hits 31M Shares, Signaling Strong Investor Interest Broadcom shares surged after the company posted results that beat Wall Street forecasts. Strong demand for AI chips lifted revenue and boosted investor confidence. The company also secured a $10 billion order from a major client, reported to be . Broadcom's Earnings Report mentioned $15.95 billion in revenue for the third quarter. AI sales jumped 63% to $5.2 billion. The company expects this figure to climb to $6.2 billion in the next quarter. Net income rose to $4.14 billion compared with a loss a year ago. This shift added strength to the stock rally. Shares gained more than 13% in early trading, moving near $345. The stock has already risen about 32% in 2025, slightly ahead of Nvidia.

Broadcom Swings to 3Q Profit, Beats on Sales Outlook

Broadcom swung to a profit and surpassed expectations for fiscal third-quarter sales and its outlook for the current quarter. The semiconductors and software maker on Thursday posted a profit of $4.14 billion, or 85 cents a share, in the quarter ended in early August, compared with a loss of $1.88 billion, or 40 cents a share, a year earlier. Stripping out certain one-time items, adjusted per-share earnings were $1.69, ahead of the $1.66 anticipated by analysts, according to FactSet. Revenue rose 22% to $15.95 billion. Analysts surveyed by FactSet forecast revenue of $15.83 billion. AI revenue grew 63% to $5.2 billion. AI semiconductor revenue is expected to reach $6.2 billion the current quarter. For the fourth quarter, the Palo Alto company expects revenue to be $17.4 billion, ahead of the $17.02 billion Wall Street is projecting. Write to Katherine Hamilton at [email protected]

Broadcom sees strong AI growth for fiscal 2026 on new customer addition

(Reuters) -Broadcom expects artificial intelligence revenue growth for fiscal 2026 to "improve significantly", after securing more than $10 billion in AI infrastructure orders from a new customer, CEO Hock Tan said on Thursday. Tan, who was 73 as of Broadcom's March proxy filing, also said he remains committed to leading the company for at least another five years. Investors welcomed the news, sending shares up 4% in after-hours trading, as Tan is widely credited with transforming Broadcom into one of the world's most valuable chip designers. Tan had hinted at four new potential customers earlier this year who were "deeply engaged" with the company to create their own custom chips, in addition to its three existing large clients. Last quarter, a new prospect placed a firm order, turning it into a qualified customer, Tan said on an earnings call without disclosing the buyer's name. Broadcom has been one of the biggest beneficiaries of the generative AI boom, with hyperscale customers that own data centers looking for alternatives to pricier Nvidia chips. Broadcom helps design custom AI chips. "Broadcom's custom offerings for cloud giants are well-positioned as Big Tech races to push model training and inference forward, Emarketer analyst Jacob Bourne said. "While Nvidia's GPUs remain the default choice, custom silicon can deliver niche performance gains that help break through bottlenecks," he said. Investors have placed high expectations on AI-focused chip firms, betting on their expanding product lineup to fuel rapid growth. This year Broadcom has launched the Tomahawk Ultra networking chip and a next-generation Jericho networking chip to speed up AI compute, as part of its push to challenge Nvidia's dominance in the AI semiconductor industry. Broadcom shares have surged nearly 82% since the start of April, building on a more than threefold jump in the past two years, while Nvidia has gained 27% in 2025. "We expect growth in AI semiconductor revenue to accelerate to $6.2 billion in Q4," Tan said. AI revenue grew 63% to $5.2 billion in the third quarter ended August 3. While AI demand continues to soar, Tan flagged weakness in the non-AI semiconductor business, with the enterprise networking and service storage units down sequentially. Broadcom expects fourth-quarter revenue to be around $17.4 billion, compared with analysts' average estimate of $17.01 billion, according to data compiled by LSEG. Its third-quarter revenue of $15.95 billion beat the estimate of $15.83 billion. (Reporting by Zaheer Kachwala in Bengaluru; Editing by Shilpi Majumdar)

Broadcom forecasts upbeat fourth-quarter revenue as AI chip demand soars

(Reuters) -Broadcom forecast fourth-quarter revenue above Wall Street estimates on Thursday, banking on strong demand for its custom AI chips as enterprise clients invest heavily in data centers and machine learning applications. The company has been one of the biggest beneficiaries of the generative artificial intelligence boom, with hyperscale customers, including Google, adopting its custom accelerators due to their ability to process large quantities of data quickly. Its chips have also emerged as an alternative to Nvidia's costly processors as companies look for hardware that can be tailored to specific needs as AI becomes increasingly advanced. "We expect growth in AI semiconductor revenue to accelerate to $6.2 billion in Q4," said Broadcom CEO Hock Tan. AI revenue grew 63% to $5.2 billion in the third quarter ended August 3. Investors have placed high expectations on AI-focused chip firms such as Broadcom as they bet on its strong market position and expanding product lineup to fuel rapid growth. This year the company has launched the Tomahawk Ultra networking chip and a next-generation Jericho networking chip to speed up AI compute, as part of its push to challenge Nvidia's dominance in the AI semiconductor industry. "Broadcom's AI-related semiconductor demand continues to shine. Results were driven by both AI interconnectivity, along with its custom ASIC business," said Summit Insights analyst Kinngai Chan. Application-specific integrated circuit, or ASIC, is a chip designed for specific tasks. Broadcom shares were up 3% in extended trading. They have risen over 30% so far this year, building on a more than threefold surge in the past two years. The company expects fourth-quarter revenue to be around $17.4 billion, compared with analysts' average estimate of $17.01 billion, according to data compiled by LSEG. Its third-quarter revenue of $15.95 billion beat the estimate of $15.83 billion. (Reporting by Zaheer Kachwala in Bengaluru; Editing by Shilpi Majumdar)

Broadcom shares rally on new AI deal, CEO's assurance

(Reuters) -Broadcom shares jumped 7% in premarket trading on Friday, as an upbeat outlook for artificial intelligence revenue and CEO Hock Tan's pledge to stay on for five more years reassured investors betting on the chipmaker's custom silicon strategy. The firm, one of the world's most valuable chipmakers, has become a key player in the generative AI boom by designing custom semiconductors for cloud giants seeking alternatives to Nvidia's GPUs. The company on Thursday said it has secured over $10 billion in AI infrastructure orders from a new customer, with Tan forecasting "significantly improved" AI revenue growth in fiscal year 2026. "Broadcom narrative is going to take off once again," Bernstein analysts led by Stacy Rasgon said. Tan's decision to extend his tenure through 2030 added to investor confidence. "Hock must see a runway here as he renewed his contract...suggesting he sees something worth sticking around for," Bernstein analysts said. Investors have bet big on AI-driven chipmakers, and have propelled Broadcom's shares nearly 32% higher so far this year, after the company's valuation crossed $1 trillion in December. LARGE DEAL BUZZ The timing of Broadcom's latest $10 billion AI deal has fueled speculation that OpenAI is the unnamed customer, following a Financial Times report on Thursday that the ChatGPT maker is working with Broadcom to develop its own custom AI chips. Tan said the new partnership would materially boost AI revenue, though he declined to name the client. The CEO earlier this year had hinted at four new potential customers who were "deeply engaged" with the company to create their own custom chips, in addition to its three existing large clients. J.P.Morgan analysts, who believe the new customer is OpenAI, said the ramp up will "materially increase" Broadcom's AI revenue outlook for fiscal 2026 and beyond, calling it a "turning point" that adds to the company's already strong pipeline of custom silicon wins. Analysts at Bernstein and Morgan Stanley also said that the timing and scale of the deal suggest OpenAI is likely behind it. The Broadcom stock trades at 38.6 times its forward earnings estimates, a premium to Marvell's 20.3 multiple and the broader S&P 500 index's 22.5, according to LSEG data. (Reporting by Rashika Singh in Bengaluru; Editing by Mrigank Dhaniwala)

Broadcom: Q3 adjusted EPS up 36%

On Thursday evening, Broadcom reported adjusted (non-GAAP) EPS growth of 36% to $1.69 and adjusted EBITDA growth of 30% to $10.7bn for Q3 (ended early August), reflecting strong operating leverage. NB: pmt +7%. The semiconductor technology group's revenues increased by 22% to nearly $16bn, a record for this period of the year, "thanks to its continued strength in custom AI accelerators, networking, and VMware, CEO Hock Tan said. AI revenue growth accelerated to +63% y-o-y to reach $5.2bn, he continued, forecasting that AI semiconductor revenue growth will accelerate to $6.2bn in Q4. More broadly, for the last three months of its fiscal year ending in early November, Broadcom management anticipates an adjusted EBITDA margin of around 67%, with projected revenues of approximately $17.4bn, up 24% y-o-y.

Broadcom shares rally as $10 billion deal shows AI strategy is paying off

(Reuters) -Broadcom shares jumped nearly 9% in premarket trading on Friday after the chipmaker unveiled a blockbuster $10 billion AI chip order from a new customer, fueling optimism about its strategy to design custom chips. The deal, which Broadcom said will "materially boost" AI revenue, comes as the company deepens its role in the generative AI boom by designing custom semiconductors for cloud giants seeking alternatives to pricier Nvidia chips. Adding to momentum for the chipmaker, CEO Hock Tan, who has led Broadcom for nearly two decades and steered it to the center of the AI boom, announced he would stay at the helm for at least five more years. If the share gains hold, the chipmaker would add roughly $125 billion to its $1.44 trillion market valuation. Broadcom's latest deal has fueled speculation that OpenAI is the unnamed customer, following a Financial Times report that the ChatGPT maker is working with Broadcom to develop its own custom AI chips. "This new business with OpenAI reflects a key strength of Broadcom which lies in working closely with customers to develop application-specific chips which, in turn, aim to deliver superior performance and energy efficiency at lower cost for specific jobs," said Russ Mould, investment director at AJ Bell. Analysts at J.P.Morgan, Bernstein and Morgan Stanley said that the timing and scale of the deal suggest OpenAI is likely behind it. OpenAI was working with Broadcom and TSMC to build its first in-house chip but dropped its ambitious foundry plans due to the costs and time needed to build a network, Reuters reported last year. The company said it expects "significantly improved" AI revenue growth in fiscal 2026. Investors have bet big on AI-driven chipmakers, propelling Broadcom's shares 32% higher this year after the company's valuation crossed $1 trillion in December. The stock trades at 38.6 times its forward earnings estimates, a premium to Marvell's 20.3 multiple and the broader S&P 500 index's 22.5, according to LSEG data. (Reporting by Rashika Singh and Akash Sriram in Bengaluru; Editing by Mrigank Dhaniwala and Arun Koyyur)

Broadcom shares rally as $10 billion chip deal shows AI strategy paying off

(Reuters) -Broadcom shares jumped 11% in premarket trading on Friday after the chipmaker unveiled a blockbuster $10 billion AI chip order from a new customer, fueling optimism around its ability to benefit from the generative AI race. The deal solidifies the company's role as a leading custom chip provider amid Big Tech's push to diversify beyond Nvidia's pricey and supply-constrained artificial intelligence processors. "While we agree Broadcom is taking more share, we believe the AI pie could just be getting bigger," BofA Securities analysts said. The latest chip order could help reinforce investors confidence in the AI rally, which has shown signs of sputtering this year. Broadcom's shares are 32% higher this year after more than doubling in value last year. If premarket gains hold, the chipmaker would add more than $160 billion to its $1.44 trillion market valuation, after crossing the trillion-dollar valuation last year. Broadcom's latest deal has fueled speculation that OpenAI is the unnamed customer. Analysts at J.P.Morgan, Bernstein and Morgan Stanley said the timing and scale of the deal suggest OpenAI is likely the new customer. Reuters reported last year that OpenAI was working with Broadcom to build its first in-house chip. While Broadcom does not identify the cloud companies it is developing custom chips for, analysts believe Alphabet's Google and Facebook-owner Meta Platforms are among its existing customers. Bernstein analysts said with the addition of this new customer, AI sales in fiscal 2026 could be well over $40 billion, up from expectations of $30 billion last quarter. Broadcom said it expects "significantly improved" AI revenue growth in fiscal 2026. Adding to momentum, CEO Hock Tan announced he would stay at the helm for at least five more years. Tan, who was 73 as of Broadcom's March proxy filing, has led the chipmaker for nearly two decades and steered it to the center of the AI boom. (Reporting by Rashika Singh, Akash Sriram abd Arsheeya Bajwa in Bengaluru; Editing by Mrigank Dhaniwala and Arun Koyyur)

Broadcom Shares Surge After Forecasting Accelerated AI Demand

Shares of Broadcom hit an all-time high Friday after the company forecast continued demand for its custom artificial-intelligence chips. The stock was recently trading 11% higher, at $339.25, after spiking to $356.34 earlier in the day. Shares are up 46% so far this year and have more than doubled in the past 52 weeks. "Demand for custom AI accelerators from our three customers continued to grow as each of them journeys at their own pace toward compute self-sufficiency," Chief Executive Hock Tan said on a call with analysts Thursday. AI revenue grew 63% to $5.2 billion in the semiconductor and software maker's latest quarter. Looking forward, the company said it added a fourth XPU customer, securing over $10 billion in orders, expected to begin ramping next year. Analysts at Oppenheimer and J.P. Morgan said the new customer is likely OpenAI. "Reflecting this, we now expect the outlook for fiscal 2026 AI revenue to improve significantly from what we had indicated last quarter," Tan said. In the near term, Broadcom expects current-quarter revenue of $17.4 billion, compared with the $17.02 billion Wall Street is projecting, according to FactSet. In its recent quarter, the company swung to a third-quarter profit of $4.14 billion, or 85 cents a share, compared with a loss of $1.88 billion, or 40 cents a share, a year earlier. Adjusted earnings were $1.69 a share, ahead of the $1.66 analysts polled by FactSet had expected. Revenue rose 22% to $15.95 billion, topping Wall Street models for $15.83 billion.

Broadcom challenges Nvidia: the hyperscalers' new secret weapon

Broadcom's Q3, which ended in early August, finished with impressive results. Adjusted EPS rose 36% to $1.69, slightly beating thevWall Street consensus. Adjusted EBITDA jumped 30% to $10.7bn, reflecting remarkable operational leverage. Revenues reached $15.95bn, up 22% y-o-y, a record for this period. As a sign of strength, the adjusted EBITDA margin is now close to 67%. In other words, two out of every three dollars generated by Broadcom are converted into operating profits, a remarkable feat in such a capital-intensive industry. The real star of the publication remains the artificial intelligence business. AI revenues soared 63% y-o-y to $5.2bn, accounting for nearly a third of total sales. Management is already anticipating $6.2bn for Q4, a figure that would represent an acceleration to 66% annual growth. The secret to this performance lies in XPUs, custom AI accelerators designed by Broadcom for cloud giants. Three long-standing customers, including Google (Alphabet), have been joined by a fourth player that has signed up for more than $10bn in orders through 2026. The company's total order backlog has reached a staggering $110bn. While Nvidia continues to dominate the GPU market, Broadcom is gradually establishing itself as the alternative for hyperscalers looking for tailor-made solutions. XPUs offer increased efficiency in targeted tasks, while network innovations (with the new-generation Tomahawk Ultra and Jericho chips) optimize power consumption and reduce latency. Hock Tan, the charismatic 73-year-old CEO, is a strong advocate of the superiority of Ethernet, an open and universal protocol, over proprietary solutions such as NVLink. In his view, its openness and mastery by network engineers make it an essential standard for connecting massive clusters of AI processors. However, not everything is rosy. The company reported some weakness in its non-AI semiconductor business, particularly in the enterprise networking and storage segments, which saw a slight sequential decline. The group also remains exposed to the structural challenge of time-to-market: it can take more than a year between the design and delivery of complete solutions by customers. This lag can weigh on short-term momentum. On the software side, however, the integration of VMware, which was finalized in November 2023, continues to bear fruit. Software revenue jumped from $7.6bn to $21.5bn in one year, making Broadcom a comprehensive platform combining semiconductors and infrastructure software. Investors welcomed the announcement: the stock gained 5% after the announcement, bringing its annual increase to more than 35%. Over the past two years, the stock has tripled in value, illustrating the enthusiasm for Hock Tan's strategy. Tan has announced that he intends to remain at the helm of the company for at least another five years, a reassuring prospect for the market. But some observers remain cautious. Betting on AI ASICs over Nvidia GPUs assumes that artificial intelligence models will become more concentrated and stable, so that customized solutions become profitable. However, the ecosystem is evolving rapidly, and ASICs are starting from a much weaker installed base. Broadcom's announcement confirms the company as one of the few players capable of standing up to Nvidia in the race for artificial intelligence. With its XPUs and integrated network solutions, it offers an alternative vision: that of customized, optimized, and scalable AI for the hyperscalers that dominate the digital economy. Broadcom remains a solid growth stock, buoyed by a colossal $110bn order book and exemplary execution. But there are some areas of concern to bear in mind: dependence on four large customers, the risk of overestimating the rise of ASICs, and the fragility of non-AI segments.