- Record FY2025 Revenue: Achieved $64 billion, up 24% YoY, driven by AI semiconductors ($20 billion, +65%) and VMware ($27 billion infrastructure software, +26%).
- Q4 2025 Performance: Revenue hit $18 billion (+28% YoY), with AI semiconductors reaching $6.5 billion (+74% YoY) and a $73 billion AI backlog expected to ship over 18 months.
- 2026 Growth Projections: Q1 revenue guided to $19.1 billion (+28% YoY), AI revenue to double sequentially, and a 10% dividend increase to $0.65/share, with share repurchases extended to 2026.
- Strategic AI Partnerships: Secured a $1 billion order from a fifth customer and a 3-year agreement with OpenAI for 10 gigawatts of AI capacity (2027–2029), alongside custom silicon development for top clients.
- Supply Chain & Technology: Partially insourcing advanced packaging in Singapore to address bottlenecks and developing silicon photonics for efficient interconnects, despite uncertain near-term adoption timelines.
Segment Performance
Infrastructure software revenue grew 26% to $27 billion, contributing to the overall growth. The company's backlog stands at $73 billion, which will be shipped over the next 18 months, with expectations of more orders being absorbed into the backlog for shipments within the next six quarters. As Hock Tan, Broadcom's CEO, noted, the company has a good handle on bottlenecks in AI system racks, excluding power supplies and transformers.
AI Revenue Growth
Broadcom expects significant growth in AI revenue, with Q1 2026 revenue doubling from Q1 2025. The company has secured a $1 billion order from a fifth customer and has a non-binding agreement with OpenAI to develop 10 gigawatts of AI capacity between 2027 and 2029. The AI business has a lower gross margin than the rest of Broadcom's business, but the company expects operating leverage to benefit its operating margin.
Valuation
With a P/E Ratio of 69.64 and an EV/EBITDA of 48.29, the market is pricing in high growth expectations. The company's ROE is 31.47%, indicating strong profitability. Analysts estimate next year's revenue growth at 51.2%, which may be challenging to sustain given the current valuation multiples.
Outlook
Broadcom expects AI revenue to continue accelerating, driving most of the growth, while non-AI semiconductor revenue is expected to be stable. Infrastructure software revenue is expected to grow at a low double-digit percentage. The company has extended its share repurchase program through the end of 2026 and announced a 10% increase in its quarterly common stock cash dividend.