Broadcom (AVGO) reported a 46% year-over-year growth in AI revenues for Q2 FY 2025, reaching $4.4 billion. AI networking specifically surged more than 170%, now making up 40% of the company’s AI revenue. Looking ahead, Broadcom anticipates AI semiconductor revenues of $5.1 billion in Q3 FY 2025, indicating a potential 60% increase year-over-year.
The surge in demand is driven by Broadcom’s Ethernet networking technology, widely utilized by hyperscalers like Google, Meta, and Microsoft. Additionally, the company has commenced shipping its next-generation Tomahawk 6 Ethernet switch, capable of 102.4 Tbps, to address networking challenges in high-performance AI systems.
Year-to-date, Broadcom’s shares have returned 18.8%, outpacing the Zacks Electronics – Semiconductors industry’s 15% growth. The Zacks Consensus Estimate forecasts Q3 FY 2025 earnings at $1.66 per share, representing a 33.87% year-over-year increase.
