Broadcom’s Shipment of the Jericho4 Ethernet Fabric Router Strengthens ITS POSITION AT THE CORE OF AI DATA CENCR BUILDOUTS, ENORLING INTERCONNECTION OF MORE THAN ONE MILLION AI ACCELERATORS ACROS Hyperports, Full -Speed Macsec, and Roce Transport Beyond 100km.
The Launch Complements Tomahawk 6 and Tomahawk Ultra, Giving Broadcom a Full Stack for Hyperscale Ai Networking as Workloads Scale Beyond Single – Site Power and Space Limits.
Operationally, AI Networking is a Major Growth Lever: Broadcom reported Q2 Fy2025 Revenue of $ 15B, with ai semiconductor Revenue at $ 4.4b and ai Networking Representing Roughly 40% of That Segment, and Guided Q3 Revenue To $ 15.8b With ai ai semis Up 60% Year Over Year.
Management have indicated this 60% AI Cadence into Fy2026, Reflecting Subtaned Hyperscaler Investment in Training and Inference. However, The Company Also Flagged to Sequential Gross -Margin Headwind of About 130Bps in Q3 Due to a Higher Mix of Lower -Margin Xpus, Alongside Softness in Non -Ai Semis Such As Industrial and Wireless.
From a stock perspective, The Setup is balanced: Year -to -Date Outperformance and Premium Valuation Metrics Contrast With Powerful Ai Demand and Expanding Product Breeadth. Third -Park Analysis Characterizes Avgo As Trading at A Premium on Forward Sales While Carrying A Neutral Stance (Hold) Given Margin Mix Pressures and A Still -Challenging Macro Backdrop, Even As The Ai Pipeline Remins Roble.
Short -Term Sentiment May Hinge On Inflation Data, Export -Control Dynamics, and The Pace of Vmware Subscription Transions, But The Jericho4 Release Materially Reinforces Broadcom’s Moat in Ai Networking Fabrics.
