Broadcom on Thursday evening reported another strong quarter and better-than-expected guidance for the current quarter. Nonetheless, the Club stock gave up its initial pop and traded sharply lower as the Q & A session of the post-earnings conference call kicked off. Investors were apparently not satisfied with CEO Hock Tan’s answer to an important question. Revenue in the fiscal 2025 fourth quarter, which ended Nov. 2, increased 28% year over year to $18.02 billion, ahead of the $17.49 billion consensus forecast, according to the consensus of analyst estimates compiled by LSEG. Adjusted earnings per share increased 37% to $1.95, also outpacing expectations of $1.86, LSEG data showed. Adjusted EBITDA , or earnings before interest, taxes, depreciation, and amortization, grew 34% to $12.22 billion in the quarter, beating the FactSet consensus of $11.61 billion. Why we own it Broadcom is a high-quality semiconductor and software company run by the incredible CEO Hock Tan. The company is a big AI beneficiary through its networking and custom chip businesses. Competitors : Marvell Technology, Advanced Micro Devices , and Nvidia Last buy : Nov. 21, 2024 Initiation date : Aug. 24, 2023 Bottom line The reported results were solid as revenue outpaced expectations, thanks to strength in both of Broadcom’s operating segments: Semiconductor Solutions and Infrastructure Software. Profit margin performance was also strong as the company’s overall adjusted operating income margin expanded nearly 350 basis points, or 3.5 percentage points, leading to strong year-over-year earnings growth, beyond what the Street was looking for. Alongside the strong results, revenue and EBITDA margin guidance for the current fiscal 2026 first quarter were both ahead of expectations as well. Before addressing the part of the call that knocked the stock, we want to stress that, overall, Tan’s remarks got us really excited for 2026. For starters, the CEO confirmed the rumors that the fourth customer we heard about last call, which placed a $10 billion order, is indeed Anthropic, and that they’re buying the Ironwood XPUs, the generation seven TPUs on which Google’s Gemini 3 was trained and run. XPU is the term Broadcom uses to describe custom chips, which are also referred to as application-specific integrated circuits (ASICs). Tan also noted that these TPUs are being used by others, including Club name Apple , Cohere, and SSI, adding that the “scale at which we see this happening could be significant.” TPUs, or tensor processing units, are what Google calls the chips that it co-designed with Broadcom. In a “what have you done for me lately” business, Tan also noted that in the reported quarter, privately held Anthropic doubled down, placing an additional $11 billion order for delivery in late 2026. If that’s not enough, Tan said Broadcom secured a $1 billion initial order from a fifth, yet-to-be-named XPU customer, also for delivery in 2026. It was noted on the call, however,…
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