Broadcom's AI chip revenue jumped 221% to $16.7 billion, with management forecasting an aggressive path to $230 billion in AI-related revenue by 2028 despite near-term margin headwinds.
Broadcom reported 221% YoY AI chip revenue growth and guided for further acceleration, but near-term margin pressure and slightly lower revenue outlook muted stock reaction.
Broadcom reported a 221% year-over-year surge in AI semiconductor revenue to $16.7 billion, driven by strong demand from hyperscalers like Google and Meta. Despite this growth, the stock saw a muted reaction as investors weighed a slightly soft Q4 revenue outlook and margin pressure from rising memory costs. Management remains bullish, projecting AI chip revenue to reach $230 billion by fiscal 2028.
The muted response was primarily driven by a Q4 revenue guidance of $34.8 billion, which fell slightly short of some analyst expectations, alongside concerns regarding gross margin pressure from higher memory costs.