Broadcom Stock Surges on Strong AI Chip Demand and Impressive Quarterly Results
Broadcom's shares soar as the semiconductor giant reports exceptional quarterly earnings and a positive outlook driven by a 77% surge in AI chip sales, signaling robust growth in artificial intelligence technology.
HIGHLIGHTS
- Broadcom's stock experiences a significant rise in early trading following quarterly earnings and future guidance that surpass analyst predictions, fueled by strong demand for AI semiconductors.
- The company's AI chip revenue soared by 77% in the latest quarter, with forecasts indicating sustained growth in this sector.
- Citigroup maintains a buy rating on Broadcom, emphasizing AI-driven growth potential and setting a $220 price target.
Broadcom (AVGO) shares jumped over 8% in premarket trading after the company announced quarterly earnings and outlook that exceeded market expectations, largely due to booming demand for artificial intelligence (AI) chips.
The semiconductor leader reported adjusted earnings per share (EPS) of $1.60 and revenue of $14.92 billion, marking a 25% increase year-over-year and surpassing Visible Alpha estimates. The projected revenue for the upcoming quarter stands at $14.9 billion, slightly above consensus forecasts.
Broadcom highlighted a 77% increase in AI chip sales during the quarter, with future projections signaling continued momentum in this high-growth segment.
Citigroup reaffirmed its buy rating on Broadcom stock, citing the company’s AI capabilities as a key growth driver that offsets risks such as potential sanctions impacting TikTok’s parent company, ByteDance, and the possible loss of Apple’s radio-frequency (RF) chip business. Both segments represent approximately 2% of Broadcom’s fiscal 2025 sales, according to Citi.
Amid ongoing regulatory scrutiny, U.S. President Donald Trump has set an April 5 deadline for the sale or ban of TikTok, though extensions remain possible if a deal is not finalized.
Over the past year, Broadcom shares have climbed roughly 33%, despite early-year volatility caused by concerns over tech companies’ substantial AI investments and uncertainties related to trade policies and AI chip export restrictions under the Trump administration.
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