Broadcom posted strong quarterly results, but that was not enough for investors to keep the share price up. Despite significantly higher revenue and profits, the share price fell after the results were published.
In the fourth quarter of fiscal year 2025, revenue grew by 28 percent to over $18 billion. This growth was mainly driven by AI-related semiconductors, sales of which increased by 74 percent. Profits also rose sharply compared to a year earlier. Broadcom expects strong growth again for the current quarter and anticipates revenue of approximately $19.1 billion.
Nevertheless, the stock market reacted negatively. Broadcom’s share price fell by more than four percent after trading hours. According to SiliconANGLE, investors are concerned that AI chips have a lower margin than the company’s other products and that revenue outside of AI is barely growing in the current quarter. This means that the strong growth story clashes with the high expectations that were already factored into the share price.
Companies are increasingly opting for custom AI chips
The figures show that Broadcom is benefiting not only from the AI hype, but also from a structural shift in how large technology companies are building their AI infrastructure. Instead of relying exclusively on standard GPUs, more and more parties are opting for custom AI chips tailored to their own workloads.
Broadcom plays a key role in this by helping customers design and manufacture these custom chips. According to SiliconANGLE, Broadcom now has five active customers for custom AI accelerators. A new customer is said to have placed a $1 billion order for delivery in 2026. In addition, Broadcom confirmed that Anthropic is a major customer of Google’s TPUs, whose design is supported in part by Broadcom.
OpenAI is also likely to be among the customers working with Broadcom on its own AI hardware. This makes it clear that custom silicon is no longer a niche market, but a strategic choice for parties that use AI on a large scale. According to SiliconANGLE, Broadcom’s total order backlog for custom AI chips and data center components now amounts to approximately $73 billion.