Broadcom, the semiconductor giant, has made headlines with its fourth-quarter earnings report, revealing better-than-expected results and a significant surge in artificial intelligence (AI) revenue.
In the latest quarter ending Nov. 3, Broadcom reported an adjusted earnings per share of $1.42, surpassing the $1.38 expected by analysts. The company’s revenue stood at $14.05 billion, slightly lower than the anticipated $14.09 billion. Despite this, Broadcom’s stock saw a notable uptick, rising by 13% in after-hours trading.
Notably, Broadcom’s CEO Hock Tan disclosed the firm’s plans to collaborate with three major cloud customers to develop custom AI chips. This development underscores Broadcom’s commitment to advancing AI technology and catering to the growing demand for AI infrastructure.
In the semiconductor solutions group, which encompasses the company’s AI chips, revenue grew by 12% to $8.23 billion compared to the previous year. Broadcom attributes this growth to the flourishing demand for generative AI infrastructure, with AI revenue surging by a remarkable 220% to $12.2 billion for the year.
Tan shared insights about the company’s ambitious goals in the AI sector, envisioning the deployment of 1 million AI chips in networked clusters by 2027 with each of the three large customers. He projected the total market opportunity for Broadcom’s AI chips and AI networking parts to reach between $60 billion and $90 billion by 2027.
Moreover, Broadcom’s infrastructure software division witnessed a significant revenue increase of nearly threefold to $5.82 billion, fueled in part by the acquisition of VMware. As a testament to its financial strength, Broadcom announced a planned 11% increase in its quarterly dividend for fiscal 2025, raising it to 59 cents per share.
With these impressive financial results and strategic initiatives, Broadcom is poised for continued growth and innovation in the AI and semiconductor sectors. The company’s foray into custom AI chips and networking solutions signals a proactive approach to meeting evolving industry demands and underscores its position as a key player in the technology landscape.
