Dive Temporary:
- Broadcom reaped the rewards of 2025’s AI constructing increase, as its revenues for AI {hardware} grew 65% 12 months over 12 months to $20 billion for the 12-month interval ending Nov. 2, CEO Hock Tan stated Thursday, throughout a This fall 2025 earnings name. The chipmaker’s semiconductor section logged greater than $11 billion in This fall revenues, growing 35% 12 months over 12 months.
- Semiconductors and associated {hardware} accounted for the lion’s share of Broadcom’s 2025 enterprise, regardless of the corporate’s $61 billion acquisition of virtualization software program vendor VMware two years in the past. The {hardware} section introduced in $37 billion of the corporate’s $64 billion in FY 2025 revenues, whilst non-AI semiconductors development flattened.
- “AI is sucking the oxygen … out of enterprise spending elsewhere and hyperscaler spending elsewhere,” Tan stated. “We do not see it getting any worse. We do not see it recovering in a short time, aside from broadband. That is a easy abstract of non-AI.”
Dive Perception:
LLMs have been a boon for Broadcom, including tens of billions of {dollars} to the corporate’s income stream in simply the final 12 months.
Broadcom inked a $10 billion take care of a mannequin builder in Q3 that Tan revealed to be Anthropic throughout Thursday’s name. “On this quarter, This fall, we obtained an extra $11 billion order from the identical buyer for supply in late 2026,” he added.
The corporate expects demand from three massive hyperscalers to generate at the very least $60 billion and as a lot as $90 billion in annual AI-optimized semiconductor income by 2027.
Broadcom additionally has a multiyear settlement with OpenAI to codevelop AI accelerators and Ethernet {hardware}. The aim is to deploy 10 gigawatts of AI compute capability beginning within the second half of 2026, per an October announcement.
In complete, the corporate has a $73 billion {hardware} backlog on the books that it expects to ship over the subsequent 12 months and a half, Tan stated.
The VMware integration, which included vital adjustments to the seller’s product line, pricing construction and companion ecosystems, was largely an afterthought as Broadcom wrapped up its second 12 months post-acquisition.
The corporate’s infrastructure software program section noticed revenues enhance 26% 12 months over 12 months to $27 billion in 2025, pushed by “sturdy adoption of VMware Cloud Basis,” Tan stated. The section accounted for 42% of fiscal 12 months income.
Broadcom shifted the most important 10,000 clients from perpetual licenses to subscription-based VMware Cloud Basis bundles as of September, Tan stated throughout a Q3 earnings name. Broadcom has shifted its focus to driving consumption of the personal cloud providing and is incentivizing its companions to assist clients generate worth from the VCF 9.0 stack.
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