Broadcom Projects Strong Q4 Revenue as AI Chip Demand Surges
Broadcom (AVGO.O) projected fourth-quarter revenue above Wall Street expectations on Thursday, driven by booming demand for its AI chips as enterprises increase investments in data centers, machine learning, and artificial intelligence applications.
The semiconductor giant has become one of the leading beneficiaries of the generative AI boom, with hyperscale customers such as Google (GOOGL.O) adopting its custom accelerators for their efficiency in processing massive datasets.
Broadcom’s chips are also emerging as a lower-cost alternative to Nvidia’s (NVDA.O) expensive processors, appealing to companies seeking hardware optimized for specific AI workloads.
“We expect AI semiconductor revenue to reach $6.2 billion in Q4,” said Broadcom CEO Hock Tan. In the third quarter, which ended August 3, AI-related revenue surged 63% year-over-year to $5.2 billion.
Investors are bullish on AI-focused chipmakers like Broadcom, betting on its market leadership, strong product pipeline, and growing role in the semiconductor industry to sustain rapid growth.
Earlier this year, Broadcom launched the Tomahawk Ultra networking chip and a next-generation Jericho networking chip, both designed to accelerate AI computing and strengthen its challenge to Nvidia’s dominance in AI semiconductors.
“Broadcom’s AI-related semiconductor demand remains strong, supported by both AI interconnect solutions and its custom ASIC chip business,” said Summit Insights analyst Kinngai Chan.
Application-specific integrated circuits (ASICs) are specialized chips built to perform dedicated tasks more efficiently than general-purpose processors.
Shares of Broadcom climbed 3% in extended trading and have gained more than 30% in 2025 so far, adding to a more than threefold surge over the past two years.
Looking ahead, Broadcom expects Q4 revenue to be about $17.4 billion, surpassing analysts’ average estimate of $17.01 billion, according to LSEG data. The company’s third-quarter revenue reached $15.95 billion, also exceeding projections of $15.83 billion
