Broadcom's latest quarterly results delivered another earnings beat on Thursday (Friday AEST), with shares rising 3.9% in extended trading after it revealed US$10 billion (A$15.3 billion) in custom chip orders from a new client.
The semiconductor giant reported third-quarter revenue of US$15.96 billion versus expectations of $15.83 billion, with adjusted earnings per share hitting $1.69 against the $1.65 consensus.
Its AI revenue surged 63% year-over-year to $5.2 billion, with management guiding upwards for $6.2 billion in the fourth quarter.
The company secured $10 billion in orders from a new customer for custom AI accelerators, adding to its growing portfolio of hyperscale clients beyond Google.
Tan noted on a call with analysts, “One of these prospects released production orders to Broadcom, and we have accordingly characterized them as a qualified customer for XPUs,” Tan said.
He added that the large order increased Broadcom’s forecast for AI revenue next year.
“We will ship pretty strongly beginning 2026,” Tan said.
Valuation
Broadcom's market capitalisation now exceeds $1.4 trillion after shares nearly doubled over the past year.
The stock has gained 32% year-to-date, making it one of the few semiconductor winners in what analysts describe as "AI versus everything else" market dynamics.
The semiconductor industry faces unprecedented dispersion in 2025, with AI-focused companies thriving whilst traditional chip segments struggle.
McKinsey analysis shows only the top 5% of semiconductor companies have meaningfully benefited from the AI boom.
Industry forecasts predict 15% growth for semiconductors in 2025, driven primarily by AI and data centre demand.
However, this growth remains concentrated among a handful of players producing custom AI accelerators and high-bandwidth memory.
Yet Broadcom's fourth-quarter guidance of $17.4 billion exceeded Wall Street's $17.02 billion estimate, suggesting the AI infrastructure buildout continues.
