Broadcom Q2 Revenue Hits $15 Billion, Tops Estimates! Sees AI Income Growing for 10 Straight Quarters

TradingKey - On June 5, local time, semiconductor giant Broadcom announced its fiscal year 2025 second-quarter financial results, which exceeded market expectations across the board.

In this quarter, Broadcom demonstrated strong financial performance. Total revenue reached 15.004 billion, marking a 20% growth and slightly higher than the expected 14.97 billion. Adjusted net income hit 7.787 billion, a significant year-over-year increase of 441.58 — all above market expectations. Additionally, the company’s gross margin climbed to 79.4%, and adjusted EBITDA reached $10.001 billion, up 34.6% year-over-year, maintaining its industry-leading profitability.

The artificial intelligence segment remains the core driver of Broadcom's revenue growth. In this quarter, AI-related revenues contributed $4.4 billion, reflecting a year-on-year increase of 46%. However, the growth rate has notably slowed compared to previous quarters. Looking back at past data, Broadcom’s AI revenue grew by an impressive 220% in fiscal year 2024 and saw a year-on-year increase of 77% in Q1 of fiscal year 2025.

Broadcom CEO Hock Tan emphasized that three major customers have already planned to deploy over one million AI accelerator chips by 2027 for training cutting-edge models and that he anticipates adding four more customers as well. He predicts that the AI chip market could reach between 60 billion and 90 billion over the next three years.

Broadcom will continue to expand its capabilities in artificial intelligence semiconductors; the next-generation Tomahawk 6 switch chip is now being delivered and can support deployments of millions of XPU clusters. Tan stated that as our large-scale partners continue to invest, AI revenue is expected to accelerate growth to $5.1 billion in Q3, marking ten consecutive quarters of increases.

Furthermore, Broadcom provided positive guidance for overall Q3 revenue as well, predicting it will reach approximately $15.8 billion — an annual growth rate of 21%.

Despite these impressive results reported in this earnings release, Broadcom expects its Q3 AI-related revenue to rise to 5.1 billion — a figure lower than some analysts′ expectations of up to 5.29 billion — leading to concerns in the market about the slowdown in its AI business growth and fluctuations within the semiconductor sector causing Broadcom's stock price to drop by over 5% in after-hours trading.