Broadcom stock explodes: $4.1B AI Chip Sales & VMware Trump tariff vs. AI boom: Broadcom’s stock rollercoaster explained. VMware’s $3.4B impact and hyperscaler deals analyzed. Is the dip a buy opportunity?

Broadcom shares surge as profits exceed projections due to demand for bespoke AI Chips, Broadcom shares jump 16%. Seven hyperscalers are now working together to develop specialized AI silicon.

AI stocks have been struggling lately, not pursuing the acquisition of Intel components, but Broadcom’s prediction provides the kind of growth that investors are hoping.

First-quarter results from Broadcom exceeded analysts’ and provided a positive outlook for the next quarter.

Longer trading saw a 9% increase in the stock.

Broadcom provided an optimistic forecast for the current quarter and reported first-quarter results that exceeded analysts’ expectations. In extended trading, the stock had a 16% surge.

In comparison to the LSEG consensus estimates, the company performed as follows:

• $1.60 adjusted earnings per share as opposed to $1.49 expected.
• Estimated revenue: $14.92 billion as opposed to $14.61 billion.
• While Wall Street analysts had projected $14.76 billion in second-quarter sales, Broadcom said it.
• Expected to make around $14.9 billion.
• In comparison to the previous quarter, when revenue was $11.96 billion, it increased by 25%.

A solid second-quarter forecast and hints about potential new clients that may boost revenue in a fiercely competitive market helped Broadcom CEO allay investor concerns about AI chip demand.

A day after Marvell Technology shocked the market with a guiding forecast, it has allayed concerns about the desire for AI processors. Following the news, Broadcom’s stock, which had closed 6% down, surged 14% in extended trading.

The new outcome and forecast from Broadcom Inc. should provide Wall Street with much-needed solace after a difficult recent period for the AI industry.

In a time when investors are becoming more concerned about the AI chip industry, the software and semiconductor company, which has ridden the AI wave with its application-specific integrated circuits and more, made projections ahead of schedule. However, Nvidia Corp, a giant in the business, NVDA-1.57%.

Produced better-than-expected numbers and a prediction last week, but investors seemed to be looking for more oomph, and the company’s shares then had its worst post-earnings decline in years.

AVGO +3.53%, the stock of Broadcom, fell 6.3% during Thursday’s regular session due to the absence of significant progress from competitor Marvell Technology INC-6.18% for MRVL after hours trading saw them surge by almost 13% due to the company’s positive news. Logan Purk, an analyst at Edward Jones, wrote to clients late.

“We think this was a good quarter and should allay growing investor concerns about a possible slowdown in AI expenditure and the prospective rise in demand for AI chips.

At least on the bank sheet, Broadcom’s purchase of VMware seems to have been a huge success. This is after the company said that a significant portion of its top 10,000 clients had chosen to adopt its cloud Foundation stack, which led to remarkable growth.

Today, the company that makes chips and code released its first-ever FY 2025 profits for the quarter that concluded on February 2. A 25 percent increase year over year is shown by revenue of $14.92 billion. Compared to Q1 2024, net income increased by 315 percent to $5.5 billion.

Since all of Vitzilla’s product sales are now included in Broadcom’s infrastructure software business segment, which generated $6.7 billion revenue for the first quarter of this year, up from $4.55 billion for the same period the previous year, the company no longer disentangles VMware revenue.

VMware was with Broadcom for most of Q1 2024. So, direct comparisons of these metrics are inappropriate.

For example, before it acquired VMware, Broadcom generated software sales of $1.97 billion in Q4 2023 and $7.6 billion in FY 2023. bear in mind that Broadcom’s software sales increased by only 3% in FY 2023 and 4% in FY 2022.

From $1. 33 billion, or 28 cents per share, in the same time last year, the company’s reported net income increased to $5.5 billion, or $1.14 per share today.

This current boom, which saw Broadcom’s stock price more than triple last year, is based on the company’s artificial intelligence division.

The company is one of the leading providers of AI data center infrastructure, working on Google’s proprietary AI chips and providing essential parts for connecting hundreds of other chips to form sophisticated AI software.

Broadcom’s Q1 Revenue and Shares Increase

• Demand for AI chips and the VMware merger driving revenue to $14.92B for Q1, yields a 16% increase of shares for Broadcom in the after hours.
• In the year-over-year (YOY) analysis, AI chip sales increased 77% to 4.1B and the projection for Q2 is set at 4.4B as Google and other hyperscalers start using Broadcom’s custom silicon.
• Net income driven by growth in AI infrastructure and over 3.4B quarterly contribution from VMware post acquiring it, soared 315% for the year over year (YOY) to 5.5B.
• With 70% of the top 10,000 clients using the platform, VMware’s cloud Foundation fueled a 47% jump in software revenue, which exceeded 6.7B.
• Broadcom aims for 1M accelerator systems by 2027, developing 500,000 clusters in collaboration with 7 hyperscalers.
• Unlike rivals like Marvell and Nvidia, Broadcom’s prediction for revenue in Q2 at 14.9B helps lessen fears over a slowdown in AI, providing a noose for investors.
• Despite Trump-era tariffs, VMware’s subscription and reduction of 42 datacenters boosted profits.
• Post earnings share price assume policy risk losses, make a 9% pre-market rise after a 23% dip in 025 projections.
• Focused on large-scale partnerships for AI chips, Broadcom has no attention towards niche players.
• Proprietary 2nm AI XPUs with next-generation packaging for Broadcom set a lofty goal to give 10,000 teraflops dominating AI infrastructure.

The stock was down around 23% in 2025 before the after-hours surge, as investors moved out of risk due mostly to concerns about trade restrictions imposed by President Donald Trump.

The first quarter, Boardcom reported $4.1 billion in AI sales, a 77% increase from the same period last year. Boardcom’s semiconductor solutions division, which grew 11% annually to $8.21 billion during the quarter, includes such revenue.

In the statement, Broadcom CEO Hock Tan said that the company expects “continued strength in AI semiconductor revenue, with that revenue expected to reach an anticipated $4.4 billion in the second quarter.

Broadcom said in December that it had three large cloud clients and was manufacturing specialist AI processors. Tan said that the company has “deeply engaged” with two other hyperscalers in addition to those clients, and that it is collaborating with four additional prospective clients to develop their own AI chips.

Tan Said that to produce customized AI chips that may be used in large quantities, Broadcom carefully considers its partners.

In plan English, Tan went on, “We don’t do it for startups.”

Including software from its purchase of VMware in the fourth fiscal quarter of 2023, Broadcom’s infrastructure software division accounts for the second-largest portion of its sales.

VMware, which generated $3.4 billion in revenue in its most recent quarter as an independent company, is alone responsible for the slight rise in software sales, which went from $.97 billion in Q4 2023 to $6.7 billion in Q1 2025.

In a little more than a year, Broadcom has reportedly contributed almost $1 billion to quarterly VMware sales.

Why did it do that, reported VMware?

As previously reported by the Register, Broadcom has stopped selling individual VMware products and is now only offering code and support packages via subscriptions that are more expensive than Virtzilla’s prior licenses.

Broadcom CEO Hock Tan urges customers to use the full VMware Cloud foundation (VCF) stack. By Q1, more than 70% of the top 10,000 clients are already on board.

The increased revenue is probably due to upselling to VCF and larger bills for current VCF clients.

Heaven on a hyperscale scale

According to Tan, Broadcom is ” the industry’s first two nanometer AI XPU packaging as we drive towards a 10,000 teraflops XPU.” Custom silicon buyers prefer not to disclose the specifications of the equipment they purchase. Additionally, he said that he plans to provide clusters with 500,000 accelerators to current hyperscale clients before pushing for the million-accelerator clusters that Broadcom’s three current hyperscale clients want to have operational by 2027.

Products connected to artificial intelligence accounted for $4.1 billion of it, a 77 percent year-over-year increase and $300 million more than anticipated because of “stronger shipments of networking solutions to hyperscalers on AI.”

Doing business with living with Donald Trump

Broadcom CEO Tan has asked the U.S. government to build more on-premises private clouds with VMware. This move would help cut wasteful spending and modernize IT infrastructure.

Following its acquisition of VMware, Broadcom has combined 42 datacenters into seven buildings.

The combination of Trump’s tariffs and Deepseek’s launch may be to blame for the company’s share price plummeting by almost 25% for the year. After hours, he skyrocketed from around $180 to well over $200 per share. Tan does not currently have any plans to start any further businesses.