This article first appeared on GuruFocus.
Broadcom (NASDAQ:AVGO), the custom-chip and infrastructure-software powerhouse, projected $21.7 billion in fiscal fourth-quarter AI semiconductor revenue as hyperscaler spending keeps pushing its chip business higher. Shares gained approximately 0.2% to $358.13. The valuation picture adds another angle: Broadcom’s share price sits 12.42% below its $408.91 GF Value, suggesting the stock remains below GuruFocus’ estimate of fair value despite its powerful AI run.
AI semiconductor revenue surged 221% to $16.7 billion in the third quarter, accounting for roughly 56.4% of Broadcom’s $29.59 billion in total sales. Management now expects companywide fourth-quarter revenue of approximately $34.8 billion alongside a 66% non-GAAP operating margin. That combination matters. Broadcom is not simply selling more AI silicon; the company is scaling those sales while preserving an unusually rich profit profile.
The next quarter could make Broadcom even more dependent on AI. Its $21.7 billion semiconductor forecast represents roughly 62.4% of projected companywide revenue, about six percentage points above the third-quarter mix. Custom accelerators and high-speed networking remain the growth engines, but that success comes with heavier exposure to a relatively small group of hyperscale customers. Investors are effectively getting faster AI concentration and greater customer concentration at the same timeand the $358.13 share price still sits meaningfully below the GF Value benchmark.
https://finance.yahoo.com/technology/ai/articles/broadcom-edges-higher-ai-chips-184812869.html?shem=aimgspc,
