Broadcom's (AVGO) multi-cloud services provider, VMware, will likely see sales exceeding $16 billion this year, with its new artificial intelligence foundation platform providing additional upside potential, Oppenheimer said Friday.

The VMware AI foundation platform, in collaboration with Nvidia (NVDA), has 39 enterprise customers, Broadcom Chief Executive Hock Tan told analysts on a conference call late Thursday discussing its fiscal first-quarter results.

The chipmaker at the time reported stronger-than-expected quarterly results, led by upside in AI and VMware, Oppenheimer said.

Tan said in a Thursday statement that the company's AI semiconductor solutions and infrastructure software businesses fueled record revenue and adjusted earnings before interest, taxes, depreciation, and amortization. VMware is part of the infrastructure software segment.

Broadcom's sales outlook of $14.9 billion for the current quarter came in above consensus estimates. The guidance represents a 19% increase from a year earlier, with infrastructure software expected to generate $6.5 billion, Tan told analysts on the conference call.

VMware "has proven extremely sticky due to depth/breadth of integrations with legacy operating systems -- some decades old," according to the Oppenheimer note.

The brokerage reiterated its outperform rating and a $225 price target on the stock following the first-quarter beat, even as it said gross margin could soften "a bit" in the second half of the ongoing fiscal year.

Oppenheimer raised its EPS estimates for Broadcom for calendar 2025 and 2026 to $6.76 and $7.99, respectively, from $6.42 and $7.21.