AVGO First Take: Revenue and GPM were in line with market expectations this quarter, with growth largely driven by AI. AI revenue reached $6.5bn, up $1.3bn QoQ on increased TPU volume ramp.

On an operating basis, excluding acquisition-related amortization and restructuring, GPM was 76.6%, down slightly QoQ. The decline reflects a mix shift toward lower-margin ASIC.

For next quarter, the company guided revenue to $19.1bn, above Street estimates, driven by AI. AI revenue is expected to reach $8.2bn (vs. Street $7.0–7.5bn), implying a $1.7bn QoQ increase.

Despite a solid print and guide, investors are more focused on progress with new customers and orders for next year. Given the previously disclosed large AI wins, the market is watching the company's growth trajectory into next year and beyond, including whether it can secure additional customers and orders.

With Google's Gemini performing well, it offers an alternative compute stack beyond NVIDIA. Investors also expect Broadcom to win share in AI chips, a view reflected in its top-tier valuation.

As a result, the focus this quarter is on management's updates and outlook for AI order flow next year and beyond. For more, follow Dolphin Research's subsequent notes and management Trans. $Broadcom(AVGO.US)