Networking / Custom Silicon

Pull up a chair — let me walk you through how I'm seeing the back half of fiscal '26 from the Broadcom deck. Two assumptions anchor this forecast. First, custom-silicon revenue — the AI accelerator programs with our hyperscaler partners — keeps ramping through the second half. That's our highest-margin franchise, and it's pulling the consolidated gross margin into the 70% neighborhood, a step function from where we were pre-VMware. Second, the VMware integration synergies we promised the Street are still materializing in op-margin expansion; run-rate cost takeout is largely in the rearview, but the absorption benefit keeps flowing as the org gets leaner. Net income also gets a quiet lift because our interest expense rolls down as we chip away at the acquisition debt. The top risk? Concentration. A meaningful slice of incremental revenue comes from a small handful of hyperscaler customers running custom AI silicon. One program slip, one architecture pivot, one inventory digestion quarter — and the Q3-Q4 trajectory bends fast. We're also watching component lead times and any FX drag on the networking backlog. That's why I'm comfortable with a measured QoQ ramp rather than a hockey stick: poker players don't chase draws, they bet when the pot odds make sense, and right now the odds look favorable but never certain.