Broadcom Hits $8.4 B AI Chip Sales in Q1 with $73 B Order Backlog
Broadcom’s custom AI inference chip revenue reached $20 billion in fiscal 2025 and hit $8.4 billion in Q1 FY26, driving a backlog over $73 billion. Its VMware subscription transition generated $27 billion in software revenue in fiscal 2025 with 77% operating margins.
1. AI Inference Chip Business Growth
Broadcom’s custom AI inference silicon business generated $20 billion in fiscal 2025 and recorded $8.4 billion in Q1 FY26, roughly doubling year over year. Partnerships with Alphabet, Meta, ByteDance, OpenAI and Anthropic anchor a $73 billion order backlog, driven by chips costing a third of comparable GPU solutions.
2. VMware Subscription Transition
Since the 2023 VMware acquisition, Broadcom moved customers from perpetual licenses to subscription bundles priced at 2x–5x previous levels. The software segment delivered $27 billion in revenue in fiscal 2025 with 26% year-over-year growth and operating margins near 77%, creating a high-margin recurring revenue stream.