[Stock Prediction] Can Broadcom Keep Riding the AI Wave?
$Broadcom(AVGO)$ will report Q3 FY2025 earnings after market close on September 4 (ET). According to Bloomberg consensus, revenue is expected to hit $15.83B (+21.07% YoY), with adjusted EPS at $1.67 (+34% YoY).
This marks the 10th consecutive quarter of AI revenue growth. But can Broadcom keep the momentum going — or are growth concerns on the horizon?
🔍 Key Focus Areas
AI Custom Chips (XPU): Growth Powerhouse：Google's TPU v6p orders are ramping, driving strong XPU sales. Broadcom expects FY2025 AI revenue to grow ~60% YoY. Investors will watch closely for trends in pricing and shipment scale.
Networking Surge: Ethernet and Switches：New chips like Tomahawk 6 (102.4Tbps) and 1.6T optical modules are already shipping, supporting next-gen datacenter upgrades.
VMware Integration: Software Cash Flow Engine：VMware added $6.6B revenue in Q2 with improving margins and steady renewals. Subscription growth is key to stable long-term cash flow.
What Analysts Are Saying
UBS: Buy, $345 PT — Positive on TPU momentum and long-term custom chip growth.
JPMorgan: Overweight, $325 PT — Expects AI + networking tailwinds to continue.
HSBC: Upgraded to Buy, $400 PT — Stronger-than-expected ASIC momentum.
BofA: Buy, $300 PT — Highlights robust cash flow and dividend upside.
Mizuho: Buy, $315 PT — Likes dual growth drivers (AI + VMware).
🏆 How to Participate
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⏰Event Duration
August 31, 2025-Sept 5, 2025, 04:00 (SGT)
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AI Revenue Growth
Broadcom's AI revenue surged 220% to $12.2 billion in fiscal year 2024, demonstrating its robust strategy in capturing the AI chip market.
Custom Silicon Solutions
The company's focus on custom silicon solutions, particularly application-specific integrated circuits (ASICs), has garnered partnerships with high-profile clients like OpenAI and Apple.
Strategic Partnerships
Broadcom's partnerships with major tech companies have secured a strong position in several high-stakes AI projects, driving innovation and co-development.
Market Valuation
With a market capitalization exceeding $1 trillion, Broadcom reflects strong investor confidence in its AI-driven future growth.
Competition
Broadcom faces intense competition from industry giants like Nvidia, Intel, and AMD, necessitating strategic diversification and innovation.
Client Concentration
The company's reliance on a limited number of large clients for AI revenue poses risks, particularly if strategic partnerships are affected.
Growth Potential
Analysts project robust earnings growth, with some forecasting Broadcom's AI revenue to exceed $50 billion by 2027.
Future Prospects
AI Chip Market
Broadcom's focus on inference chips positions it well in the AI chip market, with potential for further growth.
Software Business
The acquisition of VMware is expected to bolster Broadcom's software portfolio, enhancing its competitive edge.
Strategic Acquisitions
Broadcom's strategic acquisitions and partnerships will be crucial in driving growth and innovation in the AI sector.
Institutional buyers are bullish on Broadcom with analysts from Goldman Sachs and Morgan Stanley raising their targets to USD 340 and USD 338 respectively.
I am super excited about Broadcom as I believe that it has lots of exponential growth ahead.
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