Broadcom CEO Hock Tan.
Lucas Jackson | Reuters
Broadcom is scheduled to report earnings for its fiscal third quarter after the shut of standard buying and selling on Thursday.
Here is what analysts expect, in line with a consensus from LSEG.
- Earnings per share: $1.65
- Income: $15.83 billion
Broadcom, which develops customized chips for Google and different big cloud corporations and likewise makes networking gear wanted to tie 1000’s of synthetic intelligence chips collectively, is predicted to report income progress of 21% from $13.07 billion a yr in the past.
Analysts undertaking income progress will maintain regular the remainder of this yr and speed up a bit in 2026.
Broadcom has been one of many chief beneficiaries of the AI increase thanks largely to its accelerator chips, which the corporate calls XPUs. The processors are typically less complicated and cheaper to function than Nvidia’s graphics processing models, or GPUs, and so they’re designed to run particular AI applications effectively.
Analysts at Cantor Fitzgerald wrote in a report final week that they count on to see elevated indicators of demand from Google and Meta.
“Moreover, all eyes will flip in direction of any visibility of present AI Customized Silicon engagements changing into prospects with high-volume ramps in sight,” wrote the analysts, who advocate shopping for the inventory.
The analysts estimate that customized silicon may generate $25 billion to $30 billion in income for Broadcom subsequent yr and greater than $40 billion by round 2027. The corporate generated complete income of $51.6 billion within the newest fiscal yr.
Shares of Broadcom are up 30% this yr and have nearly doubled prior to now 12 months, lifting the corporate’s market cap to $1.4 trillion.
Within the fiscal second quarter, AI income jumped 46% from a yr earlier to greater than $4.4 billion, with 40% from networking. CEO Hock Tan stated that quantity ought to attain $5.1 billion within the third quarter, “as our hyperscale companions proceed to take a position.”
A few of Broadcom’s growth has been fueled by acquisitions, most notably the acquisition of server virtualization software program vendor VMware for $61 billion in 2023. VMware is vital to Broadcom’s infrastructure software program enterprise, which accounted for 44% of gross sales in the latest quarter.
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