Broadcom Inc. has announced robust first-quarter financial results, surpassing Wall Street expectations. The company reported adjusted earnings of $2.05 per share on revenue of $19.31 billion, a 29% increase year-over-year. Net income rose to $7.35 billion.
CEO Hock Tan stated that Broadcom anticipates AI chip revenue to exceed $100 billion by 2027, supported by secured supply chains. The company forecasts current-quarter sales of $22 billion, significantly above projections. Semiconductor solutions revenue is expected to reach $14.8 billion.
Broadcom's growth is driven by its role in enabling major tech firms like Google, Amazon Web Services, and Microsoft to design their own AI processors. The company's AI chip-related revenue alone jumped 106% year-over-year to $8.4 billion in the quarter, fueled by demand for custom AI accelerators and networking components.
Despite concerns about AI impacting traditional software, Broadcom's infrastructure software business, bolstered by its VMware acquisition, is projected to grow. Tan emphasized that its infrastructure software is not negatively impacted by AI. Analysts see Broadcom entering a "hyper-growth phase," benefiting from AI race participants investing in its networking chips and custom accelerators.