Broadcom Inc. (AVGO) reported its fourth-quarter earnings on Thursday, exceeding Wall Street expectations and showcasing a notable increase in revenue driven by artificial intelligence (AI). The chipmaker’s stock surged over 15% to $208 in extended trading after CEO Hock Tan disclosed during the earnings call that the company is developing custom AI chips for three major cloud providers.
For the quarter ending November 3, Broadcom reported an adjusted earnings per share of $1.42, slightly above the LSEG consensus estimate of $1.38, and revenue of $14.05 billion, narrowly missing the expected $14.09 billion. Despite this, the year-over-year revenue growth was impressive, jumping 51% from $9.3 billion in the previous year. Net income also saw a healthy increase, coming in at $4.32 billion, or 90 cents per share, a 23% rise from $3.52 billion, or 83 cents per share, in the prior year’s fourth quarter.
The semiconductor solutions group, which includes Broadcom’s AI chips, experienced a 12% revenue increase to $8.23 billion from $8.03 billion year-over-year, underscoring the demand stimulated by the generative AI infrastructure boom. Annually, Broadcom’s AI revenue tripled to $12.2 billion, fueled by both the sales of custom AI chips and ethernet networking components vital for AI systems.
CEO Hock Tan emphasized the growing AI market, indicating that over the next three years, there would be substantial opportunities as hyperscaler companies increasingly focus on custom AI accelerators. He specifically mentioned that Broadcom is on track to see each of these three large customers deploy 1 million AI chips in networked clusters by 2027. Tan projected a massive market opportunity for Broadcom’s AI chips, known as XPUs, alongside networking components, estimating this market to potentially reach between $60 billion and $90 billion by 2027.
In addition to its hardware success, Broadcom’s infrastructure software division also reported robust growth, with quarterly revenues reaching $5.82 billion—a 196% increase and nearly triple last year’s figure—driven largely by the transformative impact of its $69 billion acquisition of VMware.
Looking forward, Broadcom anticipates first quarter fiscal year 2025 revenue of approx. $14.6 billion, just above the $14.57 billion analyst estimate. The company also announced an 11% increase in its quarterly dividend for fiscal 2025, setting it at 59 cents per share, reflecting confidence in its ongoing financial health and future growth prospects.
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