Broadcom reported 28% higher revenue of $18 billion for its fourth fiscal quarter ended Nov. 2, driven by a 74% jump in AI chip revenue, reflecting how its business of helping companies like Google develop specialized AI chips is lifting Broadcom’s business significantly. Broadcom shares rose 3% in -after-hours trading.
But AI chips are less than half of Broadcom’s business and other parts of the company are performing less robustly, which dilutes the growth impact. Broadcom CEO Hock Tan forecast that AI chip revenue would double in the company’s first fiscal quarter, through January, while total revenue would only rise 28% to $19.1 billion, the same growth rate as the fourth quarter.
Broadcom’s free cash flow is growing faster than its topline, however. In the fourth quarter, free cash flow hit $7.466 billion, up 36% on the year-earlier quarter.
Tan also said on the firm’s earnings call that Anthropic was the customer who placed a $10 billion order last quarter. He said Anthropic bought racks of Google’s tensor processing units. Anthropic placed another $11 billion order in the current quarter for the chips, Tan added. The Information first reported on Google’s plans to sell its TPUs directly to customers, instead of renting them through Google Cloud, in an effort to compete more directly with Nvidia.