Broadcom (AVGO) heads into its Dec. 11 fiscal Q4 earnings report with momentum few semiconductor companies can match. The company delivered record-breaking performance in the first three quarters of 2025, powered by explosive AI demand, accelerating XPU wins, VMware growth, and industry-leading profitability.
After climbing 64.5% YTD, the stock is once again in the spotlight, with the Street predicting around 40% upside. Is AVGO a buy before earnings?
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Valued at $1.8 trillion, Broadcom builds semiconductors (networking, connectivity, storage, and broadband) and also owns major infrastructure software used by large companies worldwide. Broadcom reported a record $16 billion in fiscal Q3 revenue, representing 22% year-over-year (YoY) growth, driven overwhelmingly by better-than-expected performance in AI semiconductors and continued strength in VMware.
Broadcom’s semiconductor segment delivered $9.2 billion in Q3 revenue, representing 26% YoY growth, with AI semiconductor revenue reaching $5.2 billion, up 63% YoY. This marks Broadcom’s 10th consecutive quarter of robust AI growth.
Broadcom’s infrastructure software division, anchored by the VMware acquisition, delivered $6.8 billion in Q3 revenue, up 17% YoY with a massive 93% gross margin. The company ended Q3 with an extraordinary $110 billion consolidated backlog, reflecting exceptionally high bookings as AI infrastructure spending accelerates across the hyperscale landscape. This backlog effectively locks in multi-year revenue and supports Broadcom’s long-term expansion.
During the Q3 Q&A, analysts asked what was in Broadcom’s large $110 billion backlog and how much of it was related to AI. CEO Hock Tan highlighted that semiconductors account for at least half of the overall backlog, with the majority being AI, with software continuing to increase steadily and non-AI semiconductors rising at relatively modest double-digit percentages.
A key highlight of the quarter was the sustained growth of Broadcom’s XPU business, which accounted for 65%…
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