Broadcom revenue surges 22% in Q3 on AI demand growth

PALO ALTO - Broadcom Inc. (NASDAQ:AVGO) reported third-quarter revenue of $15.95 billion on Thursday, marking a 22% year-over-year increase driven by strong demand for AI products. The company, which maintains an impressive gross profit margin of 77%, has demonstrated consistent growth with a 33.85% revenue increase over the last twelve months, according to InvestingPro data.

The semiconductor and software company posted GAAP net income of $4.14 billion for the quarter ended August 3, 2025, compared to a loss of $1.88 billion in the same period last year. Non-GAAP net income rose to $8.4 billion from $6.12 billion a year earlier.

AI-related revenue grew 63% year-over-year to $5.2 billion in the third quarter, with the company projecting AI semiconductor revenue to reach $6.2 billion in the fourth quarter.

"Broadcom achieved record third quarter revenue on continued strength in custom AI accelerators, networking and VMware," said Hock Tan, President and CEO of Broadcom, in a press release statement.

The company reported adjusted EBITDA of $10.7 billion, representing 67% of revenue, up 30% from the previous year. Free cash flow increased 47% year-over-year to a record $7 billion.

For the fourth quarter ending November 2, 2025, Broadcom forecasts revenue of approximately $17.4 billion, representing a 24% increase from the prior year period, with adjusted EBITDA expected to be 67% of projected revenue.

The company’s semiconductor solutions segment generated $9.17 billion in revenue, up 26% year-over-year, while infrastructure software revenue increased 17% to $6.79 billion.

Broadcom’s board declared a quarterly cash dividend of $0.59 per share, payable on September 30 to stockholders of record as of September 22, 2025.

The company ended the quarter with $10.72 billion in cash and cash equivalents, up from $9.47 billion at the end of the previous quarter. Notably, Broadcom has maintained dividend payments for 16 consecutive years and operates with a moderate level of debt, as highlighted in InvestingPro’s comprehensive research report, which provides detailed analysis of 1,400+ top US stocks.

In other recent news, Broadcom has seen a series of notable developments. Evercore ISI has raised its price target for Broadcom to $342, maintaining an Outperform rating, citing strong demand for data center connectivity and networking chips. Cantor Fitzgerald also increased its price target to $350, highlighting the anticipated growth in Broadcom’s Semiconductor Solutions segment, particularly in Custom Silicon products. Broadcom has announced that VMware Private AI Services will now be a standard component of VMware Cloud Foundation 9.0, making the platform AI-native. This change has led to nine of the top 10 Fortune 500 companies committing to the platform, with over 100 million cores licensed globally. Additionally, Broadcom plans to integrate NVIDIA’s Blackwell GPUs into VMware Cloud Foundation to enhance AI capabilities. These strategic moves are expected to bolster Broadcom’s position in the AI and data center markets.

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