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3d ago

Broadcom Tops Q2 With $15B Revenue Led by AI, Shares Dip on Valuation

Shares slid after hours on concern that Broadcom’s steep valuation may not match its projected earnings growth.

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Overview

  • Broadcom reported Q2 FY2025 revenue of $15 billion and adjusted earnings per share of $1.58, exceeding Wall Street forecasts.
  • The company’s AI segment saw revenue grow 46 percent year over year to $4.4 billion, driven by demand for networking components in data centers.
  • Infrastructure software revenue reached $6.6 billion, up 25 percent year over year, reflecting contributions from the VMware acquisition.
  • Management provided guidance for Q3 revenue of approximately $15.8 billion and projected AI revenue of $5.1 billion, marking ten consecutive quarters of AI growth.
  • Shares declined in after-hours trading as investors questioned whether Broadcom’s elevated price-to-sales and price-to-earnings ratios are justified.