Broadcom (AVGO) stock big pump 11% Chen Fuyang released AI heavy good news, Nvidia迎來強勁外部背書

2025-09-06 06:18:40

Artificial intelligence will not bubble, but is developing steadily. The Motley Fool analysts pointed out that Broadcom (NASDAQ: AVGO) recently announced impressive financial results, indicating that there is still strong demand for AI semiconductors from businesses. This semiconductor giant not only delivered an impressive performance report but also indirectly provided a boost for its long-term competitor Nvidia (NASDAQ: NVDA), proving that the AI-related industry will still be favorable in the future.

Broadcom CEO Hock Tan recently announced during the release of the Q3 financial report for fiscal year 2025 that revenue from artificial intelligence-related businesses increased by 63% year-on-year, reaching 5.2 billion USD, marking ten consecutive quarters of growth in AI-related products and services. This public data undoubtedly strengthens market confidence in the long-term prospects of the AI industry and provides a strong rebuttal to recent doubts about whether Nvidia's stock price has "risen too much." As of the time of writing, Broadcom (AVGO) stock surged by 11%, with the current share price reaching USD $340.10, purely a market observation, not any investment advice.

NVIDIA's growth is not a flash in the pan.

In recent years, Nvidia's GPUs have become the core technology for global AI development, with its chips being the gold standard for training and inference models. This wave of technology driven by AI has caused Nvidia's stock price to soar over 1070% since the beginning of 2023, with a market capitalization exceeding $4 trillion, making it the first AI chip company to reach this milestone in history. However, as the market's excessive enthusiasm for AI heats up, some investors are beginning to question whether this rally has come too fast and too strong, while Broadcom's latest financial report has successfully countered many bearish voices.

Broadcom (AVGO) earnings report exceeded expectations, proving the explosion of AI business

Broadcom's revenue for the third quarter reached $15.95 billion, a year-on-year increase of 22%; adjusted earnings per share (EPS) were $1.69, a year-on-year increase of 36%. This far exceeded analysts' expectations of $15.82 billion and $1.66. Moreover, Broadcom's free cash flow also hit $7 billion, a year-on-year increase of 47%.

AI-related businesses have become the main driving force behind this wave of growth and are further expanding their customer base. CEO Chen Fuyang revealed that in addition to the original three large-scale customers, a fourth customer has passed the qualification certification, becoming a source of orders for its AI accelerator. As a result, Broadcom's order reserve has risen to $110 billion, indicating that demand is still rapidly expanding.

Broadcom's earnings outlook revised upwards

Broadcom further raised its expectations for the fourth quarter of this fiscal year, predicting revenue will reach $17.4 billion, a year-on-year increase of 24%, exceeding market expectations of $17.01 billion. Chen Fuyang even revealed that the originally expected growth rate for 2026 would be on par with 2025, but it now appears that the growth rate is accelerating. Chen Fuyang has also received the board's affirmation, and his term as CEO has been extended to 2030, demonstrating the company's confidence in his AI strategic layout.

Is AI hype or long-term value? The data speaks for itself.

Broadcom's impressive performance is not only a victory for itself but also serves as evidence of the healthy growth of the overall AI industry. This is undoubtedly a significant advantage for Broadcom's strong competitor, NVIDIA. NVIDIA's CEO Jensen Huang pointed out in a recent earnings call that global data center spending is expected to grow from the current approximately $600 billion to between $3 trillion and $4 trillion by 2030, with the widespread application of AI technology being the driving force behind this growth.

Broadcom's latest financial report also reveals that part of the expansion of its backlog orders comes from additional demand from existing cloud giants, indicating that cloud service providers are actively increasing capital expenditures, which may directly translate into sustained demand for NVIDIA GPUs. According to data from IoT Analytics, NVIDIA currently holds 92% of the global data center GPU market, and its position in the fields of AI training and inference is difficult to shake.

Despite the recent buzz in the market about whether the "AI hype is cooling down," the financial reports from Broadcom and NVIDIA indicate that this technological revolution has only just begun.

From a valuation perspective, although Nvidia's stock price has surged, its price-to-earnings ratio is only 27 times next year's estimated earnings, which remains attractive for a company expected to grow its revenue by as much as 58% this year.

In the future, as AI applications move from the cloud to edge and end devices, NVIDIA's technology and market leadership will further expand. From an industry trend perspective, the wave of AI hardware infrastructure construction is far from over, and NVIDIA is undoubtedly the most central beneficiary of this wave. Broadcom's impressive performance not only has analysts generally optimistic but also serves as a strong endorsement for competitors like NVIDIA and other AI-related industries.