Riding on the global demand for AI chips, Broadcom has reported a second-quarter net revenue of $15bn for fiscal year 2025, narrowly surpassing Wall Street’s projection of $14.99bn. Analysts surveyed by FactSet had anticipated that Broadcom would report earnings of $1.57 per share with a revenue of $14.96bn.
For the third quarter, the US-based semiconductor manufacturer anticipates approximately $15.8bn in revenue, exceeding analysts’ expectations of $15.7bn. For the third quarter ending 3 August 2025, Broadcom expects to achieve an adjusted EBITDA target of at least 66% of expected revenue, based on current business trends.
The second quarter, meanwhile, saw a 20% annual increase in revenue, driven by growing demand for custom chips used in AI applications, highlighting Broadcom’s strategic focus on AI technology advancements.
Investor confidence has been evident as Broadcom shares have risen 12% this year following significant growth last year, spurred by interest in AI-focused chip products. In March, CEO Hock Tan disclosed collaborations with three major cloud service providers on AI chip development. During the reported quarter, Broadcom reported $4.4bn in AI-related sales, primarily from networking components that link complex server clusters.
“Broadcom achieved record second quarter revenue on continued momentum in AI semiconductor solutions and VMware. Q2 AI revenue grew 46% year-over-year to over $4.4bn driven by robust demand for AI networking,” said Broadcom’s president and CEO, Hock Tan. “We expect growth in AI semiconductor revenue to accelerate to $5.1bn in Q3, delivering ten consecutive quarters of growth, as our hyperscale partners continue to invest.”
Despite these positive results, Broadcom’s shares declined by 3% in premarket trading as some investors expected a more optimistic forecast given the advancements in generative AI technology.
Broadcom launches Tomahawk 6 switch series
In the second quarter ending 4 May 2025, Broadcom’s semiconductor solutions division reported net revenues of $8.4bn, marking a 17% increase from last year’s $7.2bn. The infrastructure software segment, including VMware products, recorded revenues of $6.59bn, reflecting a 25% rise from the previous year’s $5.28bn.
GAAP net income for Q2 reached $4.96bn, representing an increase of 134% compared to $2.12bn in Q2 2024. The GAAP diluted earnings per share for Q2 25 were $1.03, compared to $0.44 for the same period in the previous year.
“Adjusted EBITDA increased 35% year-over-year to $10bn, reflecting our strong business model,” said Broadcom CFO Kirsten Spears. “Free cash flow was a record $6.4bn, up 44% year-over-year.”
Earlier this week, Broadcom also began shipping its Tomahawk 6 switch series, which is claimed to offer a switching capacity of 102.4 Terabits per second within a single chip. Designed to support next-generation AI networks with enhanced scalability and energy efficiency, Tomahawk 6 provides AI routing features and interconnect options suited for extensive AI clusters.
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