Broadcom has forecast second-quarter revenue exceeding Wall Street estimates, driven by robust demand for advanced chips powering artificial intelligence applications in data centers. The company anticipates AI semiconductor revenue to reach $10.7 billion in Q2.
Big Tech firms are investing heavily in AI infrastructure, projected to exceed $630 billion this year, which directly boosts demand for components from companies like Broadcom. Broadcom's CEO Hock Tan highlighted this accelerating AI revenue growth.
The company expects quarterly revenue of approximately $22.0 billion, surpassing the analysts' average estimate of $20.56 billion. Broadcom also announced a new share repurchase program valued at up to $10 billion.
Earlier this year, Broadcom projected sales of at least 1 million chips by 2027 using its stacked design technology, a move expected to generate billions in revenue. This technology allows for more powerful chips that consume less energy, essential for AI software's growing computing needs.
While the infrastructure software segment saw slower growth at 1% ($6.80 billion) in the first quarter, the AI chip demand remains a significant driver. Broadcom shares experienced volatility in extended trading.