Broadcom is growing rapidly thanks to AI, but investors are critical

"Broadcom posted strong quarterly results, but that was not enough for investors to keep the share price up. Despite significantly higher revenue and profits, the share price fell after the results were published. In the fourth quarter of fiscal year 2025, revenue grew by 28 percent to over $18 billion. This growth was mainly driven by AI-related semiconductors, sales of which increased by 74 percent. Profits also rose sharply compared to a year earlier."

"Nevertheless, the stock market reacted negatively. Broadcom's share price fell by more than four percent after trading hours. According to SiliconANGLE, investors are concerned that AI chips have a lower margin than the company's other products and that revenue outside of AI is barely growing in the current quarter. This means that the strong growth story clashes with the high expectations that were already factored into the share price."

Broadcom reported Q4 fiscal 2025 revenue of over $18 billion, a 28 percent increase year-over-year, with AI-related semiconductors sales up 74 percent. Profits rose sharply and the company guided approximately $19.1 billion in revenue for the current quarter. Despite the strong top-line and profit growth, the share price fell more than four percent after hours. Investor concerns center on lower margins for AI chips compared with other products and weak non-AI revenue growth this quarter. Broadcom supports customers designing custom AI accelerators, counts five active customers, and has secured large orders and TPU design partnerships with major AI firms.

Read at Techzine Global