Broadcom CEO Hock Tan.
lucas jackson reuter
broadcom reported better-than-expected fourth-quarter profits on Thursday, saying its annual artificial intelligence revenue more than tripled.
The chipmaker’s stock soared after Broadcom CEO Hock Tan said the company was developing custom AI chips with three major cloud customers. Shares rose 13% in extended trading.
Here are Broadcom’s earnings and LSEG consensus forecasts for the quarter ending November 3:
Earnings per share: $1.42 adjusted, $1.38 forecast Revenue: $14.05 billion, $14.09 billion forecast
Broadcom said it expects first-quarter revenue to be about $14.6 billion, slightly above the average analyst estimate of $14.57 billion. Fourth-quarter sales increased 51% from $9.3 billion year-over-year.
Net income for the quarter was $4.32 billion, or 90 cents per share, an increase of 23% from $3.52 billion, or 83 cents per share, in the year-ago period.
Sales of the company’s Semiconductor Solutions Group, which includes artificial intelligence chips, increased 12% to $8.23 billion from $8.03 billion in the same period last year.
Broadcom is seeing a surge in demand due to the boom in generative AI infrastructure. The company said its AI revenue for the year rose 220% to $12.2 billion. Part of that growth is due to Ethernet networking components used to connect thousands of AI chips.
“We believe there are opportunities in the AI space over the next three years,” Tan told investors on an earnings call. “Certain hyperscalers at scale are beginning their own journeys to develop their own custom AI accelerators.”
Tan said Broadcom is currently developing AI chips with three very large customers, and expects each customer to deploy 1 million AI chips in networked clusters by 2027. I said that there is. Tan said the total market opportunity for AI chips, which the company calls XPUs, is: And the AI networking component could be worth $60 billion to $90 billion by 2027.
Broadcom said its infrastructure software division’s revenue for the quarter was $5.82 billion, nearly tripling from $1.96 billion last year. This includes a boost from the $69 billion acquisition of VMware, which was completed after the same period last year.
Broadcom announced an 11% increase in its 2025 quarterly dividend to 59 cents per share.
WATCH: Broadcom stock earnings soar
