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Loading chart...Broadcom's quarterly gross margin has trended steadily upward from ~62% in mid-2021 to recent highs near 77%, driven by the VMware acquisition and an increasing mix of high-margin infrastructure software.

Key quarterly inflection points: - Jan 24 (74.5%) — first full quarter post-VMware close, margin jumped ~6pp - Jul 24 (76.3%) — sustained above 76% as software revenue scaled - Jan 26 (76.8%) — most recent quarter at nearly 77%

The chart above shows the full quarterly trajectory.

Let me check Broadcom's segment-level disclosures in their filings.The short answer is: no, Broadcom does not disclose gross margin by segment.

Here's what they do report — and what that means:

Broadcom only discloses segment operating income, not segment gross profit. The company reports revenue and operating income for its two segments:

Why no segment gross margin? Broadcom does not allocate certain cost of revenue items — particularly amortization of acquisition-related intangibles — by segment. These run ~$6B annually and sit at the consolidated level, making segment-level gross margin impossible to compute from public filings.

What we can infer directionally from their MD&A: - Infrastructure Software carries a meaningfully higher gross margin than Semiconductor Solutions. The 2025 10-K explicitly notes the consolidated gross margin improvement (63% → 68%) was driven partly by "higher infrastructure software gross margin percentage." - Using segment operating income margins as a proxy, in FY 2025: Software ~77%, Semi ~58% — but this includes R&D and SG&A allocations, so it's not gross margin.

If you want, I can build a quarterly chart showing the two segments' revenue mix and operating margin trends instead — it's the closest public data to what you're asking for.

Now I have the quarterly segment revenues. I still need segment operating income — let me search for that in the Q filings.I now have all the quarterly data I need. Let me also get the FY2025 Q4 (the most recent) — the 10-K for 2025 has the fourth quarter segment detail. Let me also look at the FY2024 Q4 data from the 10-K.Now let me compile all the quarterly data. I have the 10-Q filings giving me the first three quarters and the 10-K giving annual totals. I need to derive Q4 for each FY. Let me now compute the full dataset.

Loading chart...Here are Broadcom's segment operating income margins quarterly since the VMware acquisition closed (Nov 2023):

Key takeaways:

• Infrastructure Software settled into a 75–78% operating margin range after the VMware integration, though Q4 dips each year reflect seasonal license timing (Nov 24 at 51%, Nov 25 at 75% — improving as the subscription model matures).
• Semiconductor Solutions has been grinding steadily higher, from ~55% to nearly 59%, driven by AI networking demand and favorable mix.
• The gap between the two segments has widened: Software now delivers roughly 18–20pp higher operating margins than Semiconductors.

The chart above shows the full trend.

Excellent — I now have the two most recent quarters from FY2026. Let me extract the Q1 FY2026 (Feb 1, 2026) and Q2 FY2026 (May 3, 2026) data and also the exact prior-year comparators.

From the filings:

Q1 FY2026 (Feb 1, 2026): - Semi rev: $12,515M, Infra rev: $6,796M - Semi OI: $7,503M, Infra OI: $5,323M

Q2 FY2026 (May 3, 2026) — single quarter: - Q2 cumulative total semi OI = $16,784M, Q1 semi OI = $7,503M → Q2 semi OI = $9,281M - Q2 cumulative total infra OI = $10,970M, Q1 infra OI = $5,323M → Q2 infra OI = $5,647M - Semi rev Q2: $15,009M, Infra rev Q2: $7,178M

Now let me also get the Q1 FY2025 comparator from my earlier data to verify, and then compute everything.

Loading chart...Here's the updated segment operating margin picture through the latest quarter (May 2026):

What's new: Both segments hit record operating margins in the latest quarter. Semiconductor Solutions surged to 61.8% — up ~400bp from a year ago — as custom AI accelerators and networking scale are driving massive operating leverage (revenue nearly doubled YoY to $15B while OpInc jumped 93%). Infrastructure Software hit 78.7%, continuing its steady climb as the subscription mix improves.

Broadcom's Infrastructure Software segment is a portfolio of enterprise software products, organized around four main areas:

1. Private Cloud / Virtualization (VMware) The core of the segment. VMware Cloud Foundation (VCF) is the flagship — a full-stack software platform that virtualizes compute, storage, and networking in on-premise data centers. Customers use it to run their own private clouds alongside public clouds (hybrid cloud). This generates both subscription license revenue and recurring support/maintenance fees.

2. Mainframe Software Enterprise software for IBM mainframe environments — security, DevOps, and operations management tools. Broadcom inherited this largely from the CA Technologies acquisition.

3. Cybersecurity Enterprise security software — identity and access management, privileged access management, and threat detection. Also largely from CA Technologies.

4. Enterprise Software & FC SAN Includes automation and workload management tools (formerly CA), plus Fibre Channel Storage Area Networking (FC SAN) — the physical modules, switches, and subsystems that connect servers to storage arrays in data centers, which incorporates Broadcom's own silicon.

Revenue model: The segment makes money through software licensing (both subscription and perpetual), associated professional services, and hardware for the FC SAN business. The very high operating margins (~78%) reflect the software-heavy mix — software has near-zero incremental cost to deliver vs. the semiconductor side.

No — VMware is not the default across the largest cloud and AI data centers. It depends heavily on the type of data center:

Public Cloud Hyperscalers (AWS, Azure, Google Cloud) VMware is largely absent in their core infrastructure. These companies built their own software stacks from scratch — AWS with Nitro/KVM, Azure with Hyper-V, Google with Borg/KVM. They don't pay Broadcom a cent for virtualization. VMware does have a limited bridge product (VMware Cloud on AWS) but it's a niche offering for enterprises migrating on-prem workloads to AWS, not how AWS itself runs.

Consumer Internet / AI Labs (OpenAI, Meta, Google DeepMind) These run on Linux + KVM or bare metal, sometimes with Kubernetes orchestration. They have no use for VMware. Their workloads are custom-built and designed to run directly on commodity hardware managed by open-source tooling. OpenAI specifically runs on Azure's infrastructure, which as noted above is Hyper-V/KVM based — not VMware.

Traditional Enterprise Data Centers This is VMware's stronghold. Banks, insurers, telcos, hospitals, government agencies — organizations running thousands of legacy enterprise applications (Oracle, SAP, Windows Server) in their own facilities. These workloads were built in the VMware era and migrating them is expensive and risky. This is what Broadcom is monetizing with VCF. It's a very large and sticky installed base, but it's not growing like cloud-native infrastructure.

Why Broadcom's strategy still works Hock Tan isn't betting on converting AWS or OpenAI. He's betting on the existing VMware installed base and extracting more revenue from it — shifting customers from perpetual licenses to subscriptions, bundling products, and raising prices. The installed base is massive (most Fortune 500 companies) and switching costs are high in the short-to-medium term. The question for investors is how long that moat holds as enterprises gradually shift workloads to cloud-native architectures.

Loading chart...Here's the segment revenue growth picture (YoY):

The story is stark: Broadcom is now two very different businesses:

• Semiconductor Solutions is exploding — custom AI accelerators (XPUs) and networking for hyperscalers are driving accelerating growth. Revenue nearly doubled YoY in the last quarter and the growth rate is still accelerating (52% → 78%).

• Infrastructure Software has decelerated sharply — from 47% YoY post-VMware close to just 9% now. The initial VMware revenue catch-up (converting backlog, reclassifying revenue) is done. From here it's a mature software business growing in the high single digits, which is why Broadcom is extracting margin rather than chasing growth in this segment.

The chart above shows the divergence clearly.