The AI narrative is alive and kicking vigorously. If anyone were still in doubt, the recent pristine earnings print from Broadcom (AVGO) should have laid to rest any lingering consternation on that count.
Broadcom, which has gained particular prominence in recent years for designing AI-specific ASICs and accelerators, reported a 22 percent year-over-year increase in revenue for its fiscal Q3 2025 to $15.95 billion, beating the consensus estimate of $15.83 billion. It also beat consensus expectations for EPS by reporting a $1.69 print.
So far this year, Broadcom has launched the Tomahawk Ultra networking chip, which is an Ethernet switch chip designed for intra-data-center connectivity, and a next-gen Jericho networking chip, which is a purpose-built Ethernet router for large-scale, distributed AI clusters.
Critically, Broadcom's AI semiconductor revenue surged by 63 percent year-over-year to $5.2 billion. And, completing its trifecta of beats, the company raised its guidance for Q4, now projecting total revenue of $17.4 billion and AI semiconductor revenue of $6.2 billion.
It is hardly a surprise, therefore, that Melius Research's Ben Reitzes just termed Broadcom's recent earnings call as "the most bullish and memorable call" he can remember, hiking Broadcom's stock price target to $415 per share.
Do note that Broadcom's surging AI semiconductor revenues remain at the heart of this nascent bullish shock, delivered with a crispness only someone of Tan's experience could have managed.
Elsewhere, we came to know that OpenAI could spend $10 billion on designing an ASIC with Broadcom next year, as per a report by Financial Times. This aligns with a new $10 billion contract that Broadcom's CEO revealed during this week's earnings call.
Goldman Sachs commented on this development in the following words:
"We believe the most significant development was Broadcom's announcement that it has converted another new custom silicon customer focused on inference, which is expected to help drive "material" upside to management's prior expectation of AI Semiconductor revenue growth of ~60% in 2026."
About the author: Writing is my one incontrovertible passion. Over the past six years, he has authored over 2,200 distinct articles on financial and tech-related topics, spanning nearly 1 million words. And he has been a member of Wcctech mobile team since 2025. As an alumnus of the University of Toronto, Rotman Commerce Program, I bring nuance, in-depth knowledge, and a unique perspective to every topic that I cover. When I'm not writing, I'm traveling the world, exploring hidden confectionaries and restaurants as an aspiring food connoisseur.
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