Broadcom reported a strong third quarter with revenue rising 22% year-on-year to $15.9 billion, surpassing expectations. Earnings per share increased by 36% to $1.65. Key highlights included a significant boost in custom AI-related orders, totaling $10 billion, which CEO Hock Tan emphasized during the earnings call, revealing a fourth major customer and robust demand from big clients like Alphabet and Meta. Adjusted EBITDA rose 30% to a record $10.7 billion, and AI-related revenue grew 63% to $5.2 billion.
Looking ahead, Tan forecasted AI revenue to reach $6.2 billion in the next quarter, demonstrating ongoing strong demand for AI solutions and custom silicon. Despite a slight dip in legacy semiconductor business, overall company performance is strong, with the infrastructure software segment also showing growth, aided by Broadcom’s acquisition of VMware. The guidance for the upcoming quarter suggests continued growth, positioning Broadcom favorably in the semiconductor and AI landscape.
Overall, the results reflect deepening demand for AI semiconductors, and the company’s market strategy appears well-aligned with current technological trends, prompting analysts to raise their price targets for the stock.
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