Broadcom impresses with a 10.2% dividend increase to $0.65 per share alongside record fourth-quarter revenue of $18 billion. The company has raised its annual dividend significantly over the years, from $0.19 per share in fiscal 2016 to $2.42 per share in fiscal 2025. The future dividend growth hinges on the ongoing AI spending boom.

AVGO has upped its annual dividend for 15 consecutive years, signaling commitment to investors despite major acquisitions. In fiscal 2025, Broadcom returned $17.5 billion to shareholders through dividends and share buybacks, with free cash flow up 39%. Analysts forecast significant growth in FCF and dividends over the next few years.

CEO Hock Tan is bullish on AI growth, aiming for $120 billion in AI revenue by 2030. Despite margin pressure from AI business expansion, Broadcom’s record adjusted EBITDA of $12.2 billion in Q4 exceeded expectations. The company’s ability to maintain dividend growth hinges on continued success in the AI market.

Broadcom’s recent dividend increase aligns with strong AI revenue growth, which jumped 65% year over year to $20 billion in fiscal 2025. The company secured massive AI orders, with a total backlog exceeding $73 billion. While margin pressure persists, operating leverage may help maintain margins as revenue scales up.

Broadcom’s focus on AI and strong backlog provide visibility into future revenue, but the company’s growth relies heavily on sustained AI demand. While dividend increases have been consistent, any slowdown in AI spending could impact Broadcom’s ability to maintain its impressive track record.

Read more at Yahoo Finance: Broadcom could sustain its eye-popping 2026 dividend hike