Broadcom (AVGO) stock has surged 154% in the past year due to strong demand for its AI semiconductors. Recent financial performances show record revenue of $16 billion in Q3, led by a 22% increase year-over-year. The company’s semiconductor division saw a 26% revenue increase, with AI-related sales surging by 63%.

Broadcom’s AI business has been a key growth driver, with its XPU product line accounting for 65% of AI revenue. The addition of a fourth major AI customer with over $10 billion in committed orders is expected to boost revenue significantly. This, combined with existing customer demand, has shifted Broadcom’s outlook for fiscal 2026 to be strong.

Broadcom’s infrastructure software business, driven by the VMware acquisition, delivered $6.7 billion in revenue in Q3, up 17% from last year. The shift to VMware Cloud Foundation subscriptions has produced steady double-digit growth in recurring revenue. Despite concerns about valuation, analysts remain bullish on AVGO with a consensus “Strong Buy” rating.

With strong financial results, a growing backlog, and the addition of a new major AI customer, Broadcom is expected to maintain its upward trajectory. The VMware integration strengthens its revenue base, balancing its semiconductor gains. Despite a high valuation, strong earnings growth projections and continued AI demand suggest a premium may be justified.

Read more at Yahoo Finance: As Broadcom Wins a New AI Customer, Is AVGO Stock a Buy Now?