Broadcom Inc. (NASDAQ:AVGO) is poised to deliver stronger-than-expected quarterly results as surging demand for artificial intelligence chips and data center networking products accelerates growth across its semiconductor and infrastructure businesses.
JP Morgan analyst Harlan Sur maintained an Overweight rating on Broadcom.
Sur expects Broadcom to report stronger-than-expected results for the October quarter thanks to robust demand for its AI products, improving non-AI semiconductor trends, and accelerating VMware revenue synergies.
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AI Revenue And Key Product Catalysts
The analyst expects Broadcom to post roughly $17.5 billion+ in total revenue for the quarter with AI revenue around $6.5–$6.7 billion, above consensus, driven by the ramp of Alphabet Inc.’s (NASDAQ:GOOGL) Google’s Tensor Processing Unit (TPU) v6 (Ironwood) 3nm Application-Specific Integrated Circuit (ASIC) program and continued strength in Tomahawk 5 networking switches.
He anticipates management will guide the January quarter above Street forecasts, forecasting total revenue north of $19 billion and AI revenue near $8 billion.
Sur cites continued momentum from AI networking, the TPU v6 production ramp, the Meta Platforms Inc. (NASDAQ:META) Meta Training and Inference Accelerator (MTIA) inference ramp, and initial traction for newer programs as the basis for that outlook.
Over fiscal 2025, the analyst projects Broadcom will generate roughly $20–21 billion in AI revenue (ASICs plus networking), a roughly 60% year-over-year increase, with upside into fiscal 2026 as TPU v7, Meta MTIA 3nm ramps, early OpenAI XPU work, and the start of Tomahawk 6 shipments come online, driving his $50 billion+ AI revenue view for fiscal 2026.
Non-AI Semiconductor And VMware Trends
He expects the company’s non-AI semiconductor end markets, enterprise, server/storage, and broadband, to gradually recover on cyclical improvement, while VMware continues to deliver strong renewals and conversion/upsell to higher-value VMware Cloud Foundation (VCF) full-stack solutions.
Sur highlights Broadcom’s best-in-class gross margins, operating margins, and FCF profile, forecasting strong double-digit free-cash-flow growth that should support ongoing dividend increases and balance-sheet de-leverage.
Given Broadcom’s position as a leading supplier of custom AI ASICs and cloud networking chips, the analyst reiterates Broadcom as his top semiconductor pick.
AVGO Price Action: Broadcom shares were up 2.68% at $400.68 at the time of publication on Monday. The stock is trading near its 52-week high of $403.00, according to Benzinga Pro data.
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