In virtualized enterprise networks, distributed firewall throughput per physical NIC sets the ceiling on how aggressively operators can inspect east-west traffic without degrading application performance. Broadcom's August 6 release of vDefend SSP 5.2 and related VMware components pushes that ceiling to 75Gbps per 100G NIC server, a 241% gain, while the company's AI semiconductor business separately posted $10.8 billion in second-quarter revenue, up 143% year over year.
vDefend and Avi Load Balancer: what the August 6 release changes
The update covers four products: vDefend SSP 5.2, vDefend 9.1.1, Avi Load Balancer 32.1.4, and the vACT 3.0 migration tool. Together they add native API protection, on-premises malware sandboxing, and full air-gapped deployment support. Avi Load Balancer throughput per controller reaches 12.25Tbps. Distributed firewall capacity scales to 75Tbps across a full VMware Cloud Foundation instance.
A new two-node deployment model reduces the hardware required to run vDefend by up to 33%. Broadcom frames these additions as a response to AI-fueled cyberattacks, giving enterprise customers a reason to expand their VMware footprint independent of the chip narrative.
Custom silicon: the concentration behind the growth numbers
Total company revenue reached $22.2 billion in the second quarter, up 48% year over year. Adjusted earnings per share came in at $2.44, up 54%, and free cash flow hit $10.3 billion, a 60% increase.
Alphabet is currently the primary buyer of Broadcom's custom silicon. Meta Platforms holds a supply agreement running through 2029; Alphabet's runs through 2031. Chief Executive Hock Tan has told investors the AI chip business will exceed $100 billion in annual revenue in 2027, a projection set against the $10.8 billion the segment generated in the second quarter alone. Broadcom has guided for AI chip revenue growth of more than 200% in the current quarter.
Two customers account for the bulk of that demand, and any disruption to either relationship would move through the stock quickly. Shares fell sharply after the most recent earnings report even as guidance pointed to accelerating sales, a gap between results and price action that reflects how much the valuation rests on assumptions about 2027 and beyond.
Where the stock sits
AVGO trades at a forward price-to-earnings ratio of 22.88 and sits roughly 20% below the all-time high set at the end of May 2026. Hedge fund ownership fell from 202 to 173 funds in the most recent quarter. Meta is expected to place larger custom silicon orders once 2027 arrives. Short interest stands at 1.47% of float.