Broadcom’s $AI Juggernaut: Can It Last?

Written byAdam Shapiro
Wednesday, Aug 27, 2025 2:25 pm ET1min read
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Aime RobotAime Summary

- Broadcom's AI semiconductors now dominate 50%+ of chip revenue, growing at 60% annually through 2026 driven by Oracle, OpenAI, and Apple's custom silicon orders.

- Legacy businesses remain stagnant while AI unit's lower gross margins contrast with 66%+ EBITDA targets, though scale is expected to offset margin pressures.

- Regulatory risks from VMware deal scrutiny and slowing non-AI segments pose challenges, but AI customer lock-in determines valuation multiples for investors.

🚀 Broadcom’s AI Boom: Can They Really Keep 60% Growth?

Broadcom’s earnings story has one engine: artificial intelligence. CFRA’s Angelo Zino highlights that AI semiconductors now make up more than half of Broadcom’s chip business, growing at a stunning 60% clip—and that pace could run through 2026. With hyperscale customers like

Oracle
, OpenAI, and
Apple
set to ramp their custom silicon orders over the next six to eight quarters, AI is rapidly becoming the lion’s share of Broadcom’s growth narrative. By contrast, legacy businesses remain sluggish, showing only faint signs of recovery and unlikely to drive multiple expansion.

Margins remain a watchpoint. While

Broadcom
targets eye-popping 66%+ EBITDA margins, its booming AI unit carries slightly lower gross margins than the rest of the portfolio. Still, Zino sees scale offsetting that pressure, keeping profitability intact. The EU’s scrutiny of the VMware deal may pose headline risk, but Zino expects software to remain a steady—if slowing—growth contributor. For investors, the call is clear: Broadcom’s multiple will rise or fall on the strength of its AI pipeline and ability to lock in new marquee customers.

  • In this video, Angelo Zino breaks down: Why AI will soon dominate Broadcom’s semiconductor revenue The ramp-up of customers like Oracle, OpenAI, and Apple Whether Broadcom can sustain 66%+ EBITDA margins despite lower AI gross margins Risks from non-AI segments and regulatory hurdles
  • 👉 For context: Broadcom is riding the same AI wave that made Nvidia a $4.4T giant, equal to 3.9% of global GDP and rivaling the economies of India or Japan.
  • 📈 If you’re following the AI chip race, semiconductors, or earnings season, this is a must-watch.
author avatar
Adam Shapiro

Adam Shapiro is a three-time Emmy Award–winning content creator, former network news correspondent, and founder of the multimedia production company TALKENOMICS. At AInvest, he created and launched Capital & Power, a video podcast series designed to drive engagement and establish thought leadership, while also producing original live streams, financial articles, and investor-focused video content. Previously, as a correspondent at FOX Business, Shapiro established the network’s Washington, D.C. bureau, reported from the White House, Capitol Hill, and the Federal Reserve, and secured exclusive bipartisan interviews with influential leaders. His reporting helped solidify FOX Business as the most-watched business channel on television. At the same time, his original Talkenomics series drew tens of thousands of viewers per episode through insightful conversations with policymakers, economists, and thought leaders. At Yahoo Finance, he played a critical leadership role in expanding digital programming to eight hours of live, bell-to-bell financial news coverage, dramatically increasing traffic from 68M to 104M unique monthly visitors and growing ad revenue from zero to over $50 million annually. Yahoo Finance continues to benefit from the credibility of Shapiro’s exclusive interviews with former President Donald Trump and numerous Fortune 500 CEOs.

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