How AI Will Redefine Broadcom In 2025

Summary:

• Broadcom achieved $51.6B in FY24 revenue, driven by VMware integration and 44% YoY growth.
• AI semiconductor revenue grew 220% YoY to $12.2B, now comprising 41% of total semiconductor revenue.
• VMware contributed $5.8B in Q4 FY24 revenue, with a 70% operating margin and >50% OpEx reduction.
• Broadcom targets $60B–$90B in AI revenue by FY27, with 65% YoY growth expected in Q1 FY25.
• Heavy reliance on three hyperscale clients and fierce competition from NVIDIA pose challenges to sustained growth.

Investment Thesis

Since the first coverage on Broadcom (NASDAQ:AVGO), “Broadcom Is AI’s Big Winner,” the stock (+33%) has massively outperformed the market S&P 500 (+3%) in terms of price return. The first coverage was focused on high AI and boosted infrastructure software revenue. In

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