Core Insights - Credo Technology Group Holding Ltd. (CRDO) reported preliminary revenue results for Q3 fiscal 2026 that significantly exceeded market expectations, highlighting its role as a key player in the demand for high-speed, energy-efficient connectivity solutions in data centers and AI infrastructure [2][3]. Revenue Performance - CRDO expects Q3 fiscal 2026 revenue to be between $404 million and $408 million, surpassing previous guidance of $335 million to $345 million, indicating a sharp increase in demand late in the quarter [3][9]. - The Zacks Consensus Estimate for CRDO's revenue is currently at $340 million, reflecting a 151.8% increase from the previous year's reported figure [4]. Growth Drivers - The company experienced a record fiscal second quarter with a 272% year-over-year revenue growth, driven by heightened demand for AI infrastructure and strong adoption of its products, including active electrical cables and high-speed SerDes ICs [4]. - CRDO anticipates over 200% year-over-year revenue growth for fiscal 2026, an increase from the prior estimate of 170%, indicating strong demand stability [5]. Customer and Market Dynamics - Management projected strong year-over-year growth from its top four customers, with one customer contributing over 10% of revenue, enhancing revenue diversification [6]. - The company is witnessing explosive momentum as hyperscale data centers expand AI capacity, leading to triple-digit revenue gains and improved profitability [4]. Future Outlook - CRDO expects mid-single-digit sequential revenue growth heading into fiscal 2027, reinforcing confidence in sustained expansion [5]. - The company will discuss detailed financial results for Q3 fiscal 2026 during its earnings call on March 2, 2026 [7]. Competitive Landscape - Competitors like Astera Labs and Broadcom are also experiencing strong demand in AI and data center infrastructure, indicating a robust market environment for connectivity solutions [8][10]. Stock Performance - Following the revenue announcement, CRDO's shares rose by 18% in pre-market trading, with a 60.1% increase over the past year compared to the Electronics-Semiconductors industry's growth of 38.1% [11]. - CRDO's forward 12-month Price/Sales ratio is 14.4, higher than the sector's average of 8.46, reflecting strong market positioning [12].

Core Insights - Broadcom and TSMC are major beneficiaries of the custom AI chip boom, alongside NVIDIA's dominance in the AI infrastructure market [2] Company Performance - Broadcom reported Q1 FY2026 revenue of $18.02 billion, a 28% increase year-over-year, with AI semiconductor revenue surging 74% [3] - TSMC posted Q4 2025 revenue of $33.73 billion, up 20.5% year-over-year, with 77% of wafer revenue from advanced 7nm and below processes [4] Future Projections - Broadcom projects AI semiconductor revenue will double year-over-year to $8.2 billion, driven by custom AI accelerators and Ethernet AI switches [3] - TSMC guides Q1 2026 revenue between $34.6 billion and $35.8 billion, indicating strong demand for AI infrastructure [6] Industry Trends - Companies like Alphabet, Amazon, and Meta are designing specialized AI accelerators, reducing reliance on NVIDIA's off-the-shelf GPUs, which creates sustained demand for chip designers like Broadcom and manufacturers like TSMC [5] - The custom chip trend is creating parallel revenue streams that benefit the entire semiconductor ecosystem, rather than replacing NVIDIA's dominance [6]

Broadcom (NASDAQ:AVGO) and Taiwan Semiconductor Manufacturing (NYSE:TSM) are emerging as major beneficiaries of the custom AI chip boom, capturing value alongside NVIDIA's continued dominance in the AI infrastructure market. Broadcom just reported Q1 FY2026 revenue of $18.02B, up 28% year-over-year, with AI semiconductor revenue surging 74%. The company's Q1 FY2026 guidance projects AI semiconductor revenue will double year-over-year to $8.2B, driven by custom AI accelerators and Ethernet AI switches. With ...

Financial Performance - Broadcom Inc. reported record quarterly revenue of $18.0 billion for Q4 2025, representing a 28% year-over-year increase, primarily driven by a 74% increase in AI semiconductor revenue [1] - Income from continuing operations for Q4 2025 was $8,518 million, up from $4,140 million in Q4 2024, indicating increased operating income [2] - The company anticipates total revenue of $19.1 billion and an adjusted EBITDA of 67% for Q1 2026 [2] Revenue Breakdown - Infrastructure software revenue for Q4 2025 was $6.9 billion, reflecting a 19% year-over-year increase [3] - Broadcom ended FY 2025 with a $73 billion infrastructure software backlog, up from $49 billion a year ago [3] - The company forecasts infrastructure software revenue to be approximately $6.8 billion in Q1 2026 and expects low double-digit percentage growth for FY 2026 [3] Market Sentiment - Following the earnings release, Morgan Stanley's Joseph Moore assigned an "Overweight" rating to Broadcom's stock and raised the price target from $443 to $462 [4]

Core Insights - Broadcom Inc.'s shares fell 11.4% following its fourth-quarter fiscal 2025 results, despite beating analysts' expectations in earnings and revenue [1][11] Financial Performance - Adjusted earnings per share for Q4 fiscal 2025 were $1.95, surpassing the Zacks Consensus Estimate by 4.3% and increasing 37.3% year over year [9] - Revenues for the quarter reached $18.02 billion, a 28.2% year-over-year increase, also beating the Zacks Consensus Estimate by 2.9% [9] - The company reported organic revenue growth of 24% year over year [9] - The Semiconductor solutions unit's revenues increased by 35% year over year, while the infrastructure software segment saw a 19% rise [10] - As of the end of Q4, Broadcom had cash and cash equivalents of $16.18 billion and long-term debt of $61.98 billion [10] AI Business Insights - Concerns over the profitability of Broadcom's AI business contributed to the share price decline, with management indicating a 100-basis-point sequential decline in gross margin expected for Q1 fiscal 2026 [2][11] - The total AI backlog at the end of fiscal 2025 exceeded $73 billion, but fell short of some analysts' estimates, impacting investor sentiment [3] - Broadcom anticipates its AI semiconductor revenues to double year over year to $8.2 billion in the fiscal first quarter, driven by custom AI accelerators and Ethernet AI switches [5] Market Reaction and Analyst Updates - Following the earnings release, there was a brief rebound in Broadcom's share price, rising 0.5% in pre-market trading on December 15, 2025 [13] - Analysts from Bank of America raised their estimates for Broadcom's pro forma earnings per share for fiscal years 2026-2027 by 8% each [14] Shareholder Returns - During fiscal 2025, Broadcom returned $17.5 billion to shareholders through $11.1 billion in dividends and $6.4 billion in share repurchases [12] ETF Investment Opportunities - Several ETFs provide exposure to Broadcom, including: - iShares Semiconductor ETF (SOXX), with AVGO holding 7.78% of the fund and a year-to-date increase of 39.8% [15] - VanEck Semiconductor ETF (SMH), with AVGO at 8.87% and a year-to-date increase of 46.2% [16] - Fidelity MSCI Information Technology Index ETF (FTEC), with AVGO at 5.20% and a year-to-date increase of 22% [17] - iShares U.S. Technology ETF (IYW), with AVGO at 3.47% and a year-to-date increase of 24.7% [18]

Core Insights - Broadcom (AVGO) reported fourth-quarter fiscal 2025 non-GAAP earnings of $1.95 per share, exceeding the Zacks Consensus Estimate by 4.3% and increasing 37.3% year over year [2][8] - Revenues rose 28.2% year over year to $18.02 billion, surpassing the Zacks Consensus Estimate by 2.94% [2][8] - AVGO shares experienced a decline of over 5% following the earnings report, despite a 128.8% appreciation over the past 12 months compared to the Zacks Computer & Technology sector's 25.4% return [2] Financial Performance - Semiconductor solutions revenues, accounting for 61.5% of net revenues, reached $11.07 billion, a 35% increase year over year, driven by a 74% surge in AI revenues [3] - Infrastructure software revenues, making up 38.5% of net revenues, increased 19% year over year to $6.94 billion [3] - Non-GAAP gross margin was 78%, up 100 basis points year over year, while adjusted EBITDA rose 34% year over year to $12.22 billion, with an adjusted EBITDA margin of 67.8%, up 310 basis points [4] Balance Sheet & Cash Flow - As of November 2, 2025, cash and cash equivalents stood at $16.18 billion, up from $10.72 billion as of August 3, 2025 [5] - Total debt was $65.14 billion, slightly up from $64.23 billion as of August 3, 2025 [5] - Cash flow from operations was $7.70 billion, compared to $7.17 billion in the previous quarter, with free cash flow at $7.47 billion, up from $7.02 billion [5] Dividend Information - On September 30, 2025, AVGO paid a cash dividend of 59 cents per share, totaling $2.80 billion, and raised its quarterly dividend payout by 10% to 65 cents per share [6] Guidance - For the first quarter of fiscal 2026, Broadcom expects revenues of $19.1 billion, with AI revenues projected to double year over year to $8.2 billion, driven by strong demand for custom AI accelerators and Ethernet AI switches [7][8] - The adjusted EBITDA margin is anticipated to be 67% for the first quarter of fiscal 2026 [9]