AI Boom Drives Sharp Profit Growth at Broadcom (AVGO)

Broadcom Inc. (NASDAQ:AVGO) is included among the 13 Top Tech Stocks Paying Consistent Dividends.

Broadcom Inc. (NASDAQ:AVGO) has consistently beaten the broader market and is on pace to do it again in 2025, which would mark its sixth straight year of outperformance. The last time the stock lagged the S&P 500 was back in 2019. Even then, the gap was narrow. The index climbed 29% that year, while Broadcom shares rose 24%. Overall, long-term investors have been well rewarded. The stock is already up more than 42% so far in 2025.

On December 11, Broadcom Inc. (NASDAQ:AVGO) posted its full-year results for fiscal 2025. Revenue reached $63.9 billion, up 24% from the prior year. The bigger surprise came from earnings. Net income jumped to $23.1 billion, nearly four times the $5.9 billion reported a year earlier.

Artificial intelligence was the clear growth driver. Broadcom said AI-related semiconductor revenue surged 74% in the most recent quarter. CEO Hock Tan added that demand remains strong into the first quarter, with AI chip revenue expected to roughly double compared with the same period last year.

Much of this strength comes from Broadcom’s custom chips designed for hyperscale customers. In late November, reports surfaced that Meta Platforms may look to buy Alphabet’s Tensor Processing Unit chips. Broadcom has worked closely with Alphabet for years on TPU development.

The company’s AI accelerators are built for highly specific workloads, especially where patterns are well defined. That contrasts with Nvidia’s GPUs, which offer more flexibility across training, inference, and high-performance computing tasks.

Broadcom Inc. (NASDAQ:AVGO) is a global technology company that designs and supplies semiconductors, enterprise software, and security solutions to customers around the world.

While we acknowledge the potential of AVGO as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you’re looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

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Disclosure: None.