Broadcom Inc. (AVGO) just handed investors another reason to believe the AI boom is very much alive. The semiconductor giant reported fourth-quarter fiscal 2025 results after Thursday's close, and the numbers tell a pretty straightforward story: AI chips are selling like crazy, and Broadcom is cashing in big time.
The Quarter That Was
Broadcom posted revenue of $18.02 billion for the quarter, comfortably ahead of analyst estimates calling for $17.49 billion. Adjusted earnings came in at $1.95 per share, beating the $1.86 consensus. But the real headline here is what's driving those numbers.
Revenue jumped 28% compared to the same quarter last year, and the engine behind that growth was AI semiconductor revenue, which exploded 74% year-over-year. That's the kind of growth that makes investors sit up and pay attention.
"We see the momentum continuing in Q1 and expect AI semiconductor revenue to double year-over-year to $8.2 billion, driven by custom AI accelerators and Ethernet AI switches," said Hock Tan, Broadcom's president and CEO. Translation: the AI spending spree isn't slowing down anytime soon.
Cash Flow and Shareholder Returns
Beyond the top-line growth, Broadcom generated approximately $7.7 billion in cash from operations and $7.47 billion in free cash flow during the period. The company closed out the quarter sitting on roughly $16.18 billion in cash and cash equivalents, giving it plenty of financial flexibility.
Broadcom's board clearly felt confident enough to reward shareholders, approving a 10% bump to the quarterly dividend. The new payout of 65 cents per share will hit accounts on December 31 for shareholders of record as of December 22.
Looking Ahead
For the current quarter, Broadcom is guiding to revenue of approximately $19.1 billion, well above the Street's $18.27 billion estimate. The company also expects adjusted EBITDA to come in at 67% of projected revenue, which would be a healthy margin by any standard.
Investors liked what they heard. Broadcom shares climbed 3.35% in after-hours trading Thursday, changing hands at $420 at the time of publication.
