Broadcom(US:AVGO)2025-09-09 22:27Summary of Broadcom's 2025 Conference Call Company Overview - Company: Broadcom (NasdaqGS:AVGO) - Event: Goldman Sachs Communication and Technology Conference - Date: September 09, 2025 Key Industry Insights - AI Opportunity: Broadcom identifies a significant opportunity in AI compute, driven by strong demand from a select group of customers focused on developing large language models (LLMs) [4][6] - AI Revenue Growth: The company projects AI revenue to grow at a rate of 60% for fiscal 2026, with expectations of acceleration beyond this figure [12][14] - Market Size: Broadcom estimates the available market for AI compute to be between $60 billion and $90 billion, with a target AI revenue exceeding $120 billion by 2030 [16][17] Core Business Strategies - Customer Focus: Broadcom is concentrating on a narrow group of customers who are actively developing LLMs, with no plans to expand beyond the current seven identified players [21][22] - Investment in AI: The company emphasizes the importance of investing in AI capabilities, with a focus on both training and inference processes [12][13] - Networking Solutions: Broadcom is positioning itself to capitalize on the shift to Ethernet and the need for high bandwidth in AI applications, aiming for optical connections to support larger clusters of GPUs and XPUs [36][41] Technological Developments - Custom ASICs vs. Merchant GPUs: Broadcom believes that enterprises will primarily rely on merchant GPUs for AI applications, while custom ASICs will be used by a select few players developing LLMs [25][29] - Networking Challenges: The company highlights the complexity of networking in AI compute, stating that the network will become the computer as the scale of operations increases [34][35] - Copackaged Optics: Broadcom is exploring copackaged optics technology, which integrates optical interconnects with silicon, although mainstream adoption is still in progress due to reliability concerns [42][44] Software Business Insights - Durability and Investment: Broadcom's software business, including VMware, is seen as stable and profitable, with a focus on durability and customer support rather than aggressive growth [51][52] - AI Revenue Potential: The company anticipates that AI revenue will surpass its non-AI software revenue within a few years, indicating a strategic pivot towards AI investments [52][53] Conclusion - Broadcom is strategically focused on leveraging its semiconductor expertise to meet the growing demand for AI compute, while maintaining a strong software portfolio. The company is committed to investing in AI technologies and networking solutions to support its targeted customer base in the evolving landscape of artificial intelligence.