On June 5th local time, Broadcom released its second quarter financial report for the fiscal year 2025 ending on May 4th. Not only did its revenue reach a historic high of $15.04 billion, but its AI chip revenue also exceeded $4.4 billion. It is expected that AI chip revenue will grow to $5.1 billion in the third quarter.
According to the financial report, Broadcom's revenue for the quarter was $15.004 billion, a year-on-year increase of 20%, exceeding the previous performance guidance of $14.9 billion. According to Generally Accepted Accounting Principles (GAAP) in the United States, the net profit was $4.965 billion, a year-on-year increase of 134%; Non GAAP net profit was $7.787 billion, a year-on-year increase of 44%; The gross profit margin is 79.4%, which is also higher than the previous performance guidance.
From the performance of specific business departments, Broadcom's semiconductor solutions division generated revenue of $8.408 billion in the second quarter, a year-on-year increase of 17%; The revenue of the infrastructure software department was 6.596 billion US dollars, a year-on-year increase of 25%.
Broadcom achieved record second quarter revenue under the continued development momentum of AI semiconductor solutions and VMware. Driven by strong demand for AI networks, AI revenue increased by 46% year-on-year in the second quarter, reaching over $4.4 billion. ”Hock Tan, President and CEO of Broadcom, stated, "As our mega scale partners continue to invest, we expect AI semiconductor revenue to accelerate to $5.1 billion in the third quarter, achieving growth for ten consecutive quarters. ”
In AI related businesses, Broadcom mainly engages in customized application specific integrated circuits (ASICs) and Ethernet network components, and is one of the major data center infrastructure suppliers. ASIC contains multiple types of chips, such as TPU (Tensor Processor), NPU (Neural Network Processor), and other "XPUs". Industry analysis suggests that Broadcom's major clients for customized ASIC chips include Google and Meta.
Broadcom expects its artificial intelligence business revenue to continue to grow, and the growth momentum of artificial intelligence chip sales in the 2025 fiscal year will continue into the next year, including the deployment of customized AI chips. Meanwhile, Chen Fuyang also mentioned that the recovery of non AI chip (industrial and wireless components) sales is relatively slow, and it is estimated to remain at around 4 billion US dollars in the third quarter.
For the third quarter, Broadcom's outlook is that its revenue for the quarter was approximately $15.8 billion, slightly higher than the market's expected $15.7 billion, a year-on-year increase of 21%. Among them, semiconductor solution revenue was about 9.1 billion US dollars, a year-on-year increase of 25%, and infrastructure software revenue was about 6.7 billion US dollars, a year-on-year increase of 16%. The adjusted EBITDA profit margin is at least 66%, slightly lower than the market expectation of 67%.
It is worth noting that in terms of market value changes, Broadcom's market value exceeded $1 trillion for the first time in December last year, becoming the third US semiconductor company with a market value exceeding $1 trillion after NVIDIA and TSMC. At the beginning of this year, the stock price of Broadcom experienced a slight correction, and since April, it has experienced a fluctuating rise in stock price. On June 5th local time, Broadcom's market value reached $1.22 trillion, surpassing TSMC's market value of $1.05 trillion in the US stock market.
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