Investors Bet on Broadcom’s AI Future Amid $75B+ Hyperscaler Spend

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Investors Bet on Broadcom’s AI Future Amid $75B+ Hyperscaler Spend

Broadcom (NASDAQ:) Inc. continues to be a central player in the AI infrastructure build-out, and recent developments across the tech landscape may strengthen its growth

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. Despite lingering market concerns about the pace and durability of AI-related spending, recent earnings season delivered a series of encouraging signals.

Several major technology firms reported strong momentum in their AI businesses, along with plans to maintain or increase capital expenditures tied to AI infrastructure.

These announcements matter for Broadcom. As a supplier of high-performance networking components and custom silicon that help power large-scale AI deployments, Broadcom’s fortunes are tightly linked to the investment cycles of its largest customers.

And while questions around competitive pressures and spending slowdowns have weighed on sentiment in recent months, investor response suggests a shift in tone: since the first of these earnings reports was released on April 24, Broadcom shares have climbed 7% through the May 6 close.

The rebound reflects growing confidence that AI infrastructure spending remains on track—and that Broadcom remains well-positioned to benefit.

AI Strength at

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& Meta Signal AI Strength for Broadcom

Two companies known as hyperscale customers of Broadcom are Alphabet (NASDAQ:),

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’s parent company, and Meta Platforms (NASDAQ:). Both companies posted strong results, largely due to the AI-centric parts of their business. Alphabet’s

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Cloud segment saw strong revenue growth of 28%. AI Infrastructure and Generative AI Solutions were key drivers of this increase. The company also confirmed its CapEx spending forecast. It plans to allocate $75 billion, much of which will go to AI infrastructure through calendar 2025. The company also said that, like Q4 2024, Cloud demand exceeded capacity this quarter, another sign that CapEx spending isn’t tailing off.

Meta also posted better-than-expected results. Its revenue grew at a solid 16% clip, and the price paid per ad increased by 10%. This indicates that the value of advertising on Meta’s apps continues to increase, likely driven by the AI investment the company is making. Meta also provided several examples showing that its AI investments are driving more engagement in its apps. Adding to the optimism around the AI story is the fact that the company actually increased its CapEx guidance for 2025 by 9%. The firm now expects to spend $68 billion at the midpoint.

Both of these results are good signs for Broadcom. They show that these AI hyperscale customers are seeing their investment in the technology lead to tangible results. Amid concerns that AI spending could slow down due to the DeepSeek revelations, these companies are in no way signaling that this is actually the case. This is key for Broadcom, considering that big reductions in AI infrastructure spending would be very bad news for the stock. The fact that Broadcom shares sold off over 17% in just one day after the DeepSeek news broke evidences this.

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#Investors #Bet #Broadcoms #Future #75B #Hyperscaler #Spend

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