Semiconductors
Broadcom: Strong Q1 and Q2 Guide
Broadcom reported a strong Q1, with revenue topping estimates by $330 million as management noted that AI revenue rose 77% YoY in the quarter. AI revenue reached $4.1 billion this quarter, beating previous guidance of $3.8 billion. The beat was driven by strength in networking with management mentioning last quarter that custom silicon would see stronger growth in H2. It was also stated networking was 40% of AI revenue while it’s typically 30% of AI revenue (confirming the higher product mix this quarter). The stock was up double-digits after hours specifically when Broadcom stated next quarter AI revenue would be $4.4 billion and when management reiterated their serviceable addressable market forecast of $60 billion to $90 billion, stating “these R&D investments are very aligned with the roadmap of our three hyperscale customers as they each race towards 1 million XPU clusters by the end of 2027. And accordingly, we do reaffirm what we said last quarter, that we expect these three hyperscale customers will generate a Serviceable Addressable Market or SAM in the range of $60 billion to $90 billion in fiscal 2027.”
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