Broadcom (NASDAQ:AVGO) surged more than 7% intra-day today after posting robust fiscal first-quarter earnings and issuing an optimistic outlook for the current quarter, driven by sustained demand for its AI chips.
The semiconductor giant has benefited from a growing shift among major cloud providers seeking alternatives to Nvidia, whose supply constraints have pushed tech titans like Microsoft and Amazon to explore Broadcom and its peer Marvell for AI chip solutions. Broadcom’s custom AI chips are helping large-scale language models process vast amounts of data at higher speeds, making them an attractive option for cloud computing firms.
For the quarter, Broadcom reported adjusted earnings per share of $1.60 on revenue of $14.92 billion, beating analyst estimates of $1.51 EPS and $14.59 billion in revenue. AI-related revenue surged 77% year-over-year to $4.1 billion, reinforcing its position as a key player in the AI-driven semiconductor space.
Broadcom’s core semiconductor solutions business posted a 55% increase, generating $8.2 billion, while its infrastructure software division also performed well, growing 45% to $6.7 billion.
The company also delivered strong guidance for its fiscal second quarter, projecting revenue of $14.9 billion, surpassing market expectations of $14.73 billion.