Broadcom's Q3 2025: Shifting Narratives on AI Growth, Backlog, Customer Engagement, and Market Dynamics

The above is the analysis of the conflicting points in this earnings call

Business Commentary:

• Record Revenue and AI Demand:
• Broadcom achieved record revenue of $16 billion for Q3 fiscal year 2025, up 22% year-on-year.

• The growth was driven by better-than-expected strength in AI semiconductors and continued growth in VMware.

• AI Semiconductor Acceleration:

• Semiconductor revenue reached $9.2 billion, with year-on-year growth accelerating to 26%, driven by AI semiconductor revenue of $5.2 billion, up 63% year-on-year.

• The company's AI revenue outlook improved significantly due to new customer orders exceeding $10 billion based on their XPUs.

• Non-AI Semiconductor Challenges:

• Non-AI semiconductor revenue of $4 billion was flat sequentially.

• Demand was slow to recover in segments like enterprise networking and server storage, but broadband showed strong growth.

• Infrastructure Software Growth:

• Revenue from the infrastructure software segment was $6.8 billion, up 17% year-on-year.
• Bookings were strong, with over $8.4 billion in total contract value during Q3, driven by the release of VMware Cloud Foundation version 9.0.