Broadcom’s Record Run Shows AI Demand Is Still Surging
While some investors have rotated out of technology over worries that artificial intelligence spending might slow, Broadcom’s latest results tell a very different story. The semiconductor and networking giant has just delivered record annual revenue of $63.9 billion in its most recent fiscal year, and analysts expect both revenue and adjusted EBITDA to compound at around the mid‑40% range through the next few years. That kind of growth is unusual for a company with an enterprise value in the trillions, yet Broadcom still trades at only 18 times next year’s expected adjusted EBITDA, suggesting the market may be underestimating the durability of AI-related demand. As a key AI growth stock, Broadcom’s performance underlines a broader data infrastructure boom: enterprises and cloud hyperscalers are continuing to invest aggressively in the hardware that keeps AI models running at scale, even as broader tech sentiment cools.
Why Broadcom Is a Bellwether for AI Infrastructure
Broadcom’s role in the AI value chain is less flashy than headline GPU makers, but arguably just as critical. Unlike companies that focus on general-purpose GPUs, Broadcom designs custom application-specific integrated circuit (ASIC) AI accelerators for hyperscale data center customers. While GPUs are typically used to train large language models and complex algorithms, Broadcom’s accelerators are optimized for inference – the phase where trained models are deployed to process live user queries and enterprise workloads. These chips help AI applications access and act on vast amounts of data efficiently, often at lower cost when deployed at scale. Major platforms such as Meta and Google’s parent Alphabet have turned to these custom solutions to handle rising inference traffic. That makes Broadcom a bellwether for ongoing AI infrastructure investment: as long as usage of AI applications climbs, demand for its accelerators and networking solutions should remain strong.
LSEG’s Record Revenue Highlights the Power of AI-Ready Data
On the other side of the AI value chain, London Stock Exchange Group is proving that high-quality, AI-ready data can be just as lucrative as cutting-edge chips. The group reported record first-quarter revenue growth of 9.8%, driven by strong trading volumes and robust momentum in its subscription businesses. Markets and all major divisions delivered double-digit growth, supported by accelerated product innovation. Management raised full-year revenue guidance to the upper half of its previously stated range, a notable vote of confidence in the durability of its growth. A key driver is LSEG’s focus on AI-ready data and digital solutions that plug directly into clients’ workflows, enabling everything from automated trading strategies to advanced risk models. In effect, LSEG is becoming a central data and analytics hub for financial institutions looking to operationalize AI, making it an attractive candidate among AI growth stocks beyond the usual hardware names.
AI Data Subscriptions and Shareholder Returns Signal LSEG’s Confidence
LSEG’s results also underscore how recurring, data-driven revenues can compound as AI adoption deepens. Nearly 10% revenue growth in the latest quarter came largely from subscription and markets businesses, where customers rely on always-on access to real-time and historical data feeds. The company highlighted accelerated adoption of AI-ready datasets and digital products, which help clients build and scale their own AI models. At the same time, LSEG plans to return over GBP 3 billion to shareholders in the next 12 months, reinforcing management’s confidence in cash generation and its AI-driven roadmap. This combination of double-digit divisional growth, raised guidance, and substantial capital returns positions LSEG as a key example of the data infrastructure boom. For investors, it illustrates that AI growth stocks are not limited to chip designers; critical data and analytics platforms are equally central to the ecosystem.
What to Watch Next in the AI ‘Picks and Shovels’ Trade
For readers tracking the AI boom through its underlying infrastructure, both Broadcom and LSEG offer useful templates. In hardware-centric names like Broadcom, watch metrics tied to AI accelerators and networking: the mix of AI-related revenue, customer adoption of custom chips, and long-term supply agreements with hyperscalers. In data and analytics platforms like LSEG, focus on growth in subscription revenues, client uptake of AI-ready data products, and deeper cloud integrations that make data easier to consume inside AI workflows. Across both types of companies, rising AI tooling adoption and increasing data usage per customer are important signals that the data infrastructure boom still has room to run. This is the essence of picks and shovels investing in AI: rather than betting on any single application, investors can look at the hardware and data pipelines that all successful AI models depend on.