Broadcom posted another impressive quarterly report, underpinned by a notable surge in its AI efforts. On Thursday night, the firm announced a 20% jump in revenue for its fiscal 2025 second quarter – bringing in $15 billion and slightly beating expectations. Adjusted earnings per share soared by 44% to $1.58 and adjusted EBITDA climbed 35% to $10 billion, proving the company’s strategy is paying off.
CEO Hock Tan expressed real confidence in the company’s growth trajectory, especially through its custom AI chips and networking solutions. He anticipates that these strong trends will carry into fiscal 2026. Strategic moves, including partnerships with Alphabet on the Tensor Processing Unit and potential collaborations with Meta Platforms and ByteDance, further boost Broadcom’s standing in the AI space.
In its semiconductor division, revenue edged up by 17%, but the star of the show was clearly the AI segment. AI semiconductor revenue surged 46%, driven by a marked increase in custom accelerator sales. Notably, the networking segment enjoyed a 170% year-over-year growth, now accounting for 40% of all AI-generated income. Even as the legacy chip business faces some challenges, the outlook in enterprise networking and broadband remains positive.
On the software front, the impact of the VMware acquisition is becoming clear. With more customers shifting to subscription models, infrastructure software revenue grew by 25%. This shift to VMware Cloud Foundation subscriptions is helping organisations create private clouds and enhance data centre virtualisation with greater ease.
Looking ahead, Broadcom forecasts a 21% increase in total revenue for its third fiscal quarter of 2025, with projections reaching $15.8 billion. With AI set to drive substantial gains and semiconductor solutions revenue expected to hit $9.1 billion, the revised stock price target of $290 per share isn’t far-fetched. Even if there are some short-term market swings, Broadcom’s innovative drive promises continued long-term strength.
