Broadcom Stock Climbs After Tops Estimates and Lifts Q4 Guide

This article first appeared on GuruFocus.

Sep 5 – Broadcom Inc. (NASDAQ:AVGO) saw its stock climb more than 5% in early Friday trading after the company topped earnings expectations and raised guidance on the back of strong AI demand.

For the third quarter of fiscal 2025, Broadcom reported record revenue of $16 billion, up 22% from a year earlier. Semiconductor revenue reached $9.2 billion, with $5.2 billion tied to AI chips, a 63% increase that marked the 10th straight quarter of growth in the segment. CEO Hock Tan said bookings hit $110 billion, boosted by the addition of a fourth qualified XPU customer and more than $10 billion in AI rack orders.

On the software side, VMware Cloud Foundation version 9.0 launched during the quarter, helping infrastructure software revenue climb to $6.8 billion. CFO Kirsten Spears noted gross margin of 78.4% and record operating income of $10.5 billion.

Looking ahead, management forecasted fourth-quarter revenue of $17.4 billion, with AI semiconductor revenue projected at $6.2 billion. Infrastructure software is expected to reach $6.7 billion, up 15% year over year.

Broadcom also confirmed that Tan will continue as CEO through 2030, signaling confidence in the company’s long-term AI strategy.