Broadcom Earnings Record Driven by AI Demand and Dividend Hike
Palo Alto, Friday, 12 December 2025.
Broadcom reported record fourth-quarter revenue fueled by surging AI chip sales, prompting a 10% dividend increase and revealing a massive $73 billion backlog for future AI infrastructure.
Shattering Bubble Fears with Record Growth
While recent market sentiment was dampened by concerns over profit margins and potential tech bubbles [1], Broadcom Inc. (AVGO) has resolutely shifted the narrative back to growth with its fiscal fourth-quarter performance reported on December 10, 2025 [2]. The semiconductor titan delivered net revenue of $18.02 billion, surpassing analyst estimates of $17.49 billion by approximately 3.03 percent [2]. This represents a 28% year-over-year increase [3], effectively countering the skepticism that overshadowed the stock earlier in the week. Net income for the quarter saw a dramatic rise, climbing 97% to $8.51 billion, or $1.74 per share [2], further validating the company’s operational leverage despite previous margin warnings.
AI Revenue and Massive Backlog
The driving force behind these results is an undeniable surge in artificial intelligence infrastructure spending. Broadcom’s AI revenue alone reached $6.5 billion in the fourth quarter, marking a 74% year-over-year increase [4]. This segment now significantly outpaces the company’s legacy businesses; for context, non-AI semiconductor revenue grew by only 2% over the same period, reaching $4.6 billion [4]. Perhaps most critical for the long-term outlook is the company’s backlog. Broadcom revealed a staggering $73 billion backlog for AI-related products, including custom chips (XPUs), switches, and digital signal processors (DSPs), all scheduled for delivery over the next 18 months [2][4]. This forward-looking metric suggests that the demand for AI hardware is not merely a momentary spike but a sustained trajectory.
Strategic Custom Silicon Partnerships
Broadcom’s strategy of developing custom silicon for hyperscalers continues to yield significant wins. During the earnings call, CEO Hock Tan highlighted that the company has secured orders from major players, including a fourth mystery customer announced in September 2025 and an additional $11 billion order from Anthropic [2][4]. Notably, Tan confirmed that Anthropic is utilizing Google’s Ironwood TPUs [2]. Furthermore, the company shed light on its partnership with OpenAI, detailing a plan to develop 10 gigawatts of compute capacity between 2027 and 2029 [4]. However, management tempered near-term expectations for this specific partnership, noting that they do not expect significant revenue from the OpenAI deal in 2026 [2].
Guidance and Shareholder Returns
Looking ahead, Broadcom provided robust guidance for the first quarter of fiscal 2026, forecasting revenue of approximately $19.1 billion [3]. This projection implies a 28% growth rate year-over-year [2]. Specifically, the company expects AI chip sales to double in the current quarter to $8.2 billion [2][3]. Reflecting confidence in this continued cash flow generation, the Board of Directors approved a 10% increase in the quarterly common stock dividend to $0.65 per share, targeting an annual dividend of $2.60 for fiscal 2026 [3]. This marks the fifteenth consecutive increase in annual dividends since the program began in 2011 [3], reinforcing Broadcom’s commitment to shareholder returns even as it aggressively scales its manufacturing capacity to meet the $73 billion backlog [4].