While numerous technology companies are still formulating their artificial intelligence strategies, Broadcom is already generating billions in revenue from this transformative technology. The semiconductor giant has quietly positioned itself as an essential infrastructure provider for the AI revolution, with financial results that demonstrate remarkable momentum. The company’s AI-related revenue skyrocketed by an astonishing 220% in the most recent fiscal year alone, suggesting this explosive growth may represent just the initial phase of a much larger trend.
Custom Silicon Drives Competitive Edge
Broadcom’s success stems from its specialized AI processors, known as XPUs (eXtended Processing Units), which are custom-designed for hyperscale data center applications. The semiconductor division alone generated $8.23 billion in revenue during the fourth quarter of 2024, representing a 12% increase. The company’s networking portfolio has become increasingly critical as AI clusters expand, requiring seamless connectivity among over 100,000 computing nodes. With its new Thor Ultra 800G AI Ethernet Network Interface Card, Broadcom has established itself as an indispensable infrastructure partner for AI workloads involving trillions of parameters.
$20 Billion AI Revenue Target Within Reach
The AI segment is evolving into Broadcom’s primary growth engine. After achieving $12.2 billion in AI revenue during fiscal year 2024, the company is now targeting the $20 billion milestone for 2025. Through the first three quarters of the current fiscal year, Broadcom has already recorded $13.7 billion in AI-related sales. The long-term outlook appears even more impressive, with the addressable market projected to reach $60 to $90 billion by 2027. CEO Hock Tan disclosed details regarding collaborations with three major hyperscale clients, each planning to deploy one million AI chips in interconnected clusters by 2027.
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VMware Acquisition Strengthens Software Business
The successful integration of VMware has significantly enhanced Broadcom’s software operations. The infrastructure software division delivered $21.5 billion in revenue during fiscal year 2024, contributing substantially to the record total revenue of $51.6 billion – a 44% year-over-year increase. Profitability metrics remain strong, with adjusted EBITDA climbing 37% to $31.9 billion. Free cash flow, excluding restructuring costs, reached $21.9 billion.
Dividend Growth Continues Uninterrupted
Alongside its operational achievements, Broadcom announced an 11% increase in its quarterly dividend to $0.59 per share for fiscal year 2025. This translates to a projected annual dividend of $2.36, establishing a new record for the company. Since initiating dividend payments in 2011, Broadcom has now raised its distribution for the fourteenth consecutive year.
Market Analysts Project Sustained Expansion
Financial research firms including Morningstar anticipate the continuation of Broadcom’s success story in the coming years. These market observers forecast a doubling of AI revenue during fiscal year 2026, followed by similar expansion in 2027. The company’s strategic partnerships with major cloud providers and its expertise in custom chip development provide sustainable competitive advantages in the rapidly expanding artificial intelligence market.
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