From Yahoo Finance: 2025-06-07 09:39:00

Broadcom reported strong AI revenue growth, but shares fell. CEO Tan appeared defensive about the market opportunity he previously touted. Despite this, custom AI chip opportunities are just beginning. The company’s overall revenue increased by 20% year over year to $15 billion, with adjusted EPS up 44%.

AI-related revenue soared 46% to $4.4 billion, with networking portfolio driving growth. Infrastructure software revenue rose 25% to $6.6 billion. Broadcom generated strong cash flow, ending the quarter with nearly $9.5 billion in cash. Forecasting a 21% revenue increase in fiscal Q3, with adjusted EBITDA around $10.4 billion.

Broadcom sees potential growth in custom AI chips, with Alphabet as a key customer. Tan’s reluctance to discuss the SAM is concerning. Despite a dip in shares, the company trades at a forward P/E ratio of about 31.5. Investors may consider buying on the dip for future growth opportunities.

Read more: Broadcom Sinks as CEO Becomes Defensive on AI Opportunity — Should Investors Buy the Dip?