Broadcom shares rise 13% on profit beat, 'massive' opportunity in AI
Broadcom is seeing soaring demand from the boom in generative AI infrastructure.
The chipmaker's stock jumped after Broadcom CEO Hock Tan said the company is developing custom AI chips with three large cloud customers. The shares were up 13% in extended trading.
Here's how Broadcom did versus LSEG consensus estimates for the quarter ending Nov. 3:
Earnings per share: $1.42, adjusted vs. $1.38 expected
Revenue: $14.05 billion vs. $14.09 billion expected
Broadcom said it expects first-quarter revenue of about $14.6 billion, just ahead of the $14.57 billion average analyst estimate. For the fourth quarter, year-over-year revenue increased 51% from $9.3 billion.
Net income in the fourth quarter came in at $4.32 billion, or 90 cents per share, up 23% from $3.52 billion, or 83 cents per share, in the same quarter a year earlier.
In its semiconductor solutions group, which includes the company's artificial intelligence chips, revenue increased 12% to $8.23 billion from $8.03 billion a year ago.
Broadcom is seeing soaring demand from the boom in generative AI infrastructure. For the year, the company said AI revenue jumped 220% to $12.2 billion. Some of that growth is from ethernet networking parts, which are used to tie together thousands of AI chips.