Broadcom Tops $1.2 Trillion—But Cracks Are Showing Beneath the AI Hype!

Broadcom Inc. has delivered a strong performance in its fiscal second quarter, reporting a record $15 billion in revenue, representing a 20% year-over-year growth. This robust showing was largely driven by its AI semiconductor business, which saw a 46% year-over-year increase, and the successful integration of VMware, whose infrastructure software sales rose 25% year-over-year. Broadcom’s AI networking segment, in particular, saw tremendous momentum with a 170% surge in revenue, bolstered by the launch of the Tomahawk 6 switch. This next-gen product aims to flatten network architecture, improving efficiency and reducing costs for hyperscale clients deploying AI clusters. The company expects AI-related revenue to hit $5.1 billion in the current quarter, up 60% year-over-year, which would make AI a third of its total projected sales. This rise is attributed to heightened demand for custom AI chips and networking components from hyperscalers like Alphabet and Meta.