Broadcom AI Revenue Hits $10.8B, Up 143% Year Over Year

Broadcom delivered a powerful signal about the health of AI infrastructure spending, reporting AI semiconductor revenue of $10.8 billion in its fiscal second quarter—a 143% increase from the prior year. The results position the chip designer as a key indicator of enterprise AI adoption momentum.

The company's total revenue reached a record $22.2 billion for the quarter ended May 3, climbing 48% year over year and accelerating from 29% growth in the previous quarter. Adjusted earnings per share of $2.44 rose 54%, surpassing analyst expectations on both metrics, according to details first reported by Yahoo Finance.

Custom chips driving growth

CEO Hock Tan attributed the record performance to "accelerating growth in AI semiconductor revenue and strong operating leverage," specifically citing increasing demand for custom AI accelerators and AI networking equipment. This marks the 13th consecutive quarter of AI-focused growth for Broadcom.

The company's custom chip business serves hyperscale cloud providers building proprietary silicon for their AI workloads, positioning Broadcom differently from competitors focused on general-purpose AI processors. This approach has generated substantial cash flow, with the company producing $10.26 billion in free cash flow during the quarter—representing 46% of revenue.

Guidance signals continued acceleration

Broadcom's outlook for the current quarter suggests the AI infrastructure buildout remains far from saturation. CFO Kirsten Spears guided for third-quarter revenue of $29.4 billion, an 84% year-over-year increase that exceeded analyst consensus of $28.47 billion. The company expects to maintain its 67% operating profit margin through what Spears described as "strong operating leverage."

More striking was Tan's forecast for AI semiconductor revenue specifically: he projects $16 billion for the third quarter, representing a 200% year-over-year surge. Broadcom has historically issued conservative guidance, suggesting actual results could exceed these already substantial projections.

Why it matters

Broadcom's results provide concrete evidence that enterprise AI spending continues to accelerate rather than plateau. As a supplier of custom chips and networking infrastructure to major cloud providers, the company's performance offers visibility into capital expenditure plans that won't appear in public earnings reports for quarters. The 143% growth rate and aggressive forward guidance indicate that hyperscale customers remain committed to expanding AI infrastructure capacity, validating the business case for continued investment in the technology stack powering generative AI applications.

These details were first reported by Yahoo Finance.