Key Points (Rewritten for Clarity & Flow)
- Broadcom beat Wall Street expectations on both earnings and revenue and issued a strong outlook powered by soaring AI demand.
- CEO Hock Tan says Broadcom expects AI chip revenue in Q1 to double year over year to $8.2 billion.
- Growth is driven by custom AI chips and semiconductors used in AI networking.
Broadcom delivered another powerhouse quarter, topping estimates on earnings and revenue and laying out a bullish forecast fueled by explosive demand for artificial intelligence hardware.
But despite the strong numbers, AVGO shares flipped from early gains to a drop of more than 4% in after-hours trading as investors parsed the company’s commentary.
Here’s how Broadcom performed vs. Wall Street expectations (LSEG):
- Earnings per share: $1.95 adjusted vs. $1.86 expected
- Revenue: $18.02 billion vs. $17.49 billion expected
Looking ahead, Broadcom expects $19.1 billion in revenue for the fiscal first quarter — a 28% jump from last year and well above the $18.3 billion analysts were calling for.
AI: The Engine Behind Broadcom’s Surge
CEO Hock Tan said the company expects AI chip sales to double this quarter to $8.2 billion, driven by its custom accelerators and AI networking semiconductors.
Total net income nearly doubled, climbing 97% to $8.51 billion, or $1.74 per share, compared to $4.32 billion, or 90 cents per share, a year earlier.
Broadcom has become one of the biggest beneficiaries of the AI gold rush — right alongside Nvidia. AVGO shares have soared 75% in 2025, after doubling last year, as its custom chips — including Google’s Tensor Processing Units — gain momentum as alternatives to Nvidia’s GPUs.
A New Big-Name Customer Revealed
On the earnings call, Broadcom confirmed a fifth customer for its custom chips and finally revealed the identity of one previously unnamed buyer:
➡️ Anthropic, which placed a $10 billion order for Google’s TPUs during the quarter.
Investors have been watching closely for signs that Broadcom’s growing list of AI clients is sticking with their long-term plans to build and deploy custom silicon.
Back in June, Broadcom said it had three customers and four prospects for custom AI chips. By September, it confirmed a mysterious fourth customer with a $10 billion order, and in October, it announced a partnership with OpenAI to develop custom silicon — though Tan said that deal likely won’t produce meaningful revenue in 2026.
Tan also revealed that Anthropic is now using Google’s latest TPU, called Ironwood.
According to Tan, most of Broadcom’s AI customers “want to control their own destiny” by building long-term, custom AI accelerators — which Broadcom calls XPUs.
A Massive Backlog, and AI Drives the Quarter
Broadcom now sits on a massive $73 billion backlog for custom chips, switches, and other AI-related data-center components expected over the next 18 months.
Total company revenue jumped 28%, thanks to a 74% surge in AI chip sales, which totaled $8.2 billion in Q4.
Its semiconductor solutions segment — where AI chip revenue is recorded — generated $11.07 billion, up 22% and beating the $10.77 billion estimate from StreetAccount.
The infrastructure software segment, which includes VMWare, surged 26% to $6.94 billion, also topping expectations.
Stronger Dividend for Investors
Broadcom announced a 65-cent per-share dividend, up from 59 cents, payable later this month.
