Broadcom's AI Edge: 'Apples-to-Oranges Comparison' Shows ASICs Outgrowing GPUs, Says Analyst

With fourth quarter results set to be unveiled on Dec. 12, Broadcom Inc. AVGO is projected to deliver a standout performance. Rosenblatt analyst Hans Mosesmann expects a "beat and modest raise" for the quarter, driven by the company's surging AI-related silicon revenue and VMware upside.

Broadcom's AI networking revenue is forecast to hit $3.5 billion this quarter, growing 10% sequentially. “We see revenues being driven by AI-related silicon strength,” says Mosesmann.

The anticipated fourth quarter revenue of $14.0 billion would reflect a 51% year-over-year increase, solidifying Broadcom's position as an AI powerhouse.

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2025 Outlook: AI Leads, But Non-AI Plays Recover

Looking ahead, Mosesmann foresees Broadcom guiding above consensus for the January quarter. With AI-related revenue expected to exceed $12 billion in 2024, the momentum doesn't stop there.

He predicts, “Non-AI semiconductor revenue should continue its recovery in CY25, while Infrastructure Software is likely to be driven by VMware strength.”

ASICs Vs. GPUs: A Win For Both

The competitive landscape between Broadcom's custom ASICs and Nvidia Corp‘s NVDA GPUs often sparks debate, but Mosesmann calls it “an apples-to-oranges comparison.“ He adds, “We see AI ASICs outgrowing GPU compute over the next several years,” highlighting Broadcom's growth potential in AI acceleration, Gen AI and networking across Cloud and Edge.

A Strong Setup For 2025

Mosesmann reiterates his Buy rating on Broadcom with a $240 price target, backed by “a low-30s P/E multiple on our FY26 Non-GAAP EPS.”

As Broadcom CEO Hock Tan emphasizes that AI compute will thrive on “open” industry connectivity standards, the company looks well-positioned for long-term success.

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