Broadcom Reports Record Revenue and Profits Amid Strong AI Demand
Broadcom reported record revenue of $29.6 billion for its fiscal third quarter, a year-over-year increase of 86%, driven by strong demand in the artificial intelligence (AI) sector. The company's AI semiconductor revenue surged 221% to $16.7 billion, marking the 14th consecutive quarter of growth in this area. Adjusted earnings per share rose 96% year-over-year to $3.32, while GAAP diluted EPS soared by 215%. Despite these impressive results and a conservative fourth-quarter revenue forecast of $34.8 billion, Broadcom's stock remained flat due to high valuations and investor profit-taking. The company also announced a quarterly dividend increase to $0.65 per share, reflecting its strong cash generation with free cash flow reaching $13.7 billion in the quarter — up 95% year-over-year. CEO Hock Tan emphasized continued momentum for AI accelerators and networking solutions, forecasting another significant rise of 236% in AI semiconductor revenue for Q4. Investors appear to be cautious due to a PEG ratio of just 0.49 despite the stock trading at high multiples — 61 times earnings and 32 times forward earnings.
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Topics: AI free cash flow revenue growth semiconductors