Broadcom Upgraded to ‘BBB+’ by Fitch with Positive Outlook
Fitch Ratings announced on Monday that it has upgraded Broadcom Inc. and its subsidiaries to ‘BBB+’ from ‘BBB’, while maintaining a Positive outlook.
According to the agency, the upgrade reflects confidence in Broadcom’s growth strategy in AI semiconductors, which is expected to strengthen its financial position. Fitch highlighted the company’s rising free cash flow and the successful integration of VMware Inc., both of which support Broadcom’s ability to pursue acquisitions while maintaining strong credit quality.
Fitch also affirmed Broadcom’s Short-Term Issuer Default Rating and commercial paper rating at ‘F2’ and assigned a ‘BBB+’ rating to its proposed senior notes.
The rating agency underlined that AI semiconductor demand and VMware’s virtualization products are key drivers of growth. Broadcom’s free cash flow is projected to rise to $15 billion–$20 billion annually in the coming years, up from less than $10 billion in the past.
For the 12 months ending August 3, 2025, Broadcom’s EBITDA leverage was estimated at 1.7x, with Fitch expecting it to remain between 1.5x and 2.0x, even if the company pursues another large debt-funded acquisition similar to VMware.
Broadcom’s revenue profile has strengthened, thanks to strong demand for AI accelerators and networking solutions supporting large language models (LLMs). Its deeper partnership with Apple Inc. is also expected to improve revenue stability while reducing product volatility.
Looking ahead, Fitch forecasts that AI semiconductor revenue will surpass non-AI semiconductor and infrastructure software revenue in the coming years. This transition, combined with the VMware integration, reduces Broadcom’s historical dependence on Apple, which previously accounted for over 20% of sales.
Fitch projects more than 20% revenue growth in FY2025, driven by AI chips and infrastructure software momentum. Continued AI investment is expected through FY2027, delivering low- to mid-teens growth, with a possible slowdown in FY2028 as the market digests earlier investment cycles.
