Broadcom Surpasses $15 Billion in Quarterly Revenue, Powered by AI Semiconductor Growth
In a stellar performance, Broadcom Inc. has announced a record-breaking second quarter fiscal year 2025 with total revenue reaching $15 billion, a notable 20% increase from the same period last year. The impressive growth was driven by continued strength in AI semiconductor and the momentum achieved in VMware.
According to Hock Tan, President and CEO of Broadcom, "our Q2 consolidated adjusted EBITDA was $10 billion, up 35% year-on-year." This remarkable operating leverage showcases the company's ability to efficiently manage its finances and drive growth. Furthermore, Q2 semiconductor revenue stood at $8.4 billion, with a growth acceleration to 17% year-on-year from 11% in Q1.
The growth was largely fueled by AI semiconductor revenue of over $4.4 billion, which is up 46% year-on-year and marks the ninth consecutive quarter of strong growth for Broadcom. Custom AI accelerators grew double digits year-on-year, while AI networking saw a staggering increase of over 170% year-on-year. Notably, AI networking based on Ethernet accounted for 40% of the company's AI revenue.
Broadcom's President Semiconductor Solutions Group, Charlie Case, highlighted the significance of Ethernet as an open protocol standard in enabling one single network fabric for both scale-out and scale-up applications. The company's Tomahawk switches, Cherry core routers, and NICs have driven success within AI clusters in hyperscale environments.
The momentum continues with the recent announcement of a breakthrough Tomahawk switch featuring 102.4 terabits per second switch capacity. This innovation enables clusters of more than 100,000 AI salarators to be deployed in just two tiers instead of three, significantly improving performance and efficiency in training next-generation frontier models.
Broadcom is also making excellent progress on the multiyear journey of enabling custom accelerators for its customers. The company has forecasted that at least three customers will deploy 1 million AI-accelerated clusters in 2027, primarily for training their frontier models. Moreover, a significant percentage of these deployments are expected to be big custom XPUs.
The recent economic environment may have raised concerns about the companies' investment plans; however, Broadcom's partners remain unwavering in their commitment to invest. In fact, they are doubling down on inference to monetize their platforms, which may lead to an acceleration of demand into the back half of 2026.
In terms of guidance for its third quarter fiscal year 2025, Broadcom forecasts AI semiconductor revenue to be $5.1 billion, up 60% year-on-year. This would mark the tenth consecutive quarter of growth in this segment. Non-AI semiconductors saw a slight decline, but with positive signs in certain areas such as broadband, enterprise networking, and service storage revenues.
