Broadcom supplies custom chips for Microsoft's new Maia AI accelerator, a key component for hyperscale data centers. Broadcom boasts a record AI-focused order backlog. These partnerships reinforce Broadcom's position as a key supplier of high-performance networking and custom silicon for large cloud providers.
Research reports anticipate Broadcom's first-quarter fiscal 2026 AI revenues will double to $8.2 billion. Strong demand for Tomahawk 6 and Jericho 4 networking products drives this growth. Benefits from the VMware acquisition also contribute to the revenue increase.
Potential headwinds include an expected sequential contraction in gross margin. The company also faces challenges related to a high debt level.