The Quiet Rotation Nobody Is Talking About Over the last […]
Most chip companies talk about the AI boom. Broadcom is the one quietly building the infrastructure behind it.
Broadcom reported record Q1 revenue of $19.3 billion, beating Wall Street's estimate of $19.1 billion. Adjusted earnings per share came in at $2.05 — well above the $1.88 analysts expected. AI semiconductor revenue hit $8.4 billion, up 106% from the same quarter last year.
For Q2, Broadcom guided for $22 billion in revenue — a 47% jump year-over-year — and $10.7 billion in AI chip revenue alone. That's 140% growth in a single quarter.
The board also approved a new $10 billion stock buyback and maintained its $0.65 quarterly dividend.
Broadcom doesn't compete with Nvidia for off-the-shelf AI chips. Instead, it designs custom chips — called XPUs — for the tech giants building their own AI infrastructure. Think Google's TPUs, Meta's MTIA accelerators, and now OpenAI's first-generation custom silicon.
CEO Hock Tan told analysts that Anthropic alone is on track for one gigawatt of compute capacity in 2026, with demand expected to surge past three gigawatts in 2027. Meta's custom chip program — which some analysts had written off — is "alive and well," Tan said, with the company targeting multiple gigawatts of capacity by 2027.
Broadcom has also locked in supply chain capacity through 2028, covering the constrained components that have bottlenecked the entire chip industry.
The headline from the earnings call: Tan said Broadcom has "line of sight" to over $100 billion in AI chip revenue in 2027 — from chips alone, not counting software. That figure would be larger than Nvidia's entire revenue last year.
The stock was down 8% going into earnings on broader market volatility. It jumped 5% after hours on the results.
Broadcom's free cash flow hit $8 billion in Q1 — 41% of revenue — giving it the firepower to keep investing while returning cash to shareholders.
If the hyperscalers keep spending, Broadcom keeps winning. Right now, they show no signs of slowing down.
The Quiet Rotation Nobody Is Talking About Over the last […]
When you hear investors talking about “the market” they’re most […]
What Is a Market Disruptor? A market disruptor is a […]
For years, the "smart money" in defense went to cyber […]
If you want to understand what you’re investing in, you […]
The Federal Reserve is an independent agency from our government […]
You know the drill: You got paid Friday. By Wednesday, […]
We live in a capitalist economy - that means the […]
The Old Defense Playbook Is Broken For the last decade, […]
Most investors are watching AI stocks and interest rates. But […]
