Broadcom CEO Hock Tan.
Lucas Jackson | Reuters
Broadcom reported better-than-expected fourth-quarter earnings on Thursday and mentioned synthetic intelligence income for the yr greater than tripled.
The chipmaker’s inventory jumped after Broadcom CEO Hock Tan mentioned the corporate is growing customized AI chips with three giant cloud prospects. The shares have been up 13% in prolonged buying and selling.
Here’s how Broadcom did versus LSEG consensus estimates for the quarter ending Nov. 3:
- Earnings per share: $1.42, adjusted vs. $1.38 anticipated
- Revenue: $14.05 billion vs. $14.09 billion anticipated
Broadcom mentioned it expects first-quarter income of about $14.6 billion, simply forward of the $14.57 billion common analyst estimate. For the fourth quarter, year-over-year income elevated 51% from $9.3 billion.
Net revenue within the fourth quarter got here in at $4.32 billion, or 90 cents per share, up 23% from $3.52 billion, or 83 cents per share, in the identical quarter a yr earlier.
In its semiconductor options group, which incorporates the corporate’s synthetic intelligence chips, income elevated 12% to $8.23 billion from $8.03 billion a yr in the past.
Broadcom is seeing hovering demand from the growth in generative AI infrastructure. For the yr, the corporate mentioned AI income jumped 220% to $12.2 billion. Some of that progress is from ethernet networking components, that are used to tie collectively hundreds of AI chips.
“We see a possibility over the following three years in AI,” Tan advised traders on the earnings name. “Massive particular hyperscalers have begun their respective journeys to develop their very own customized AI accelerators.”
Tan mentioned Broadcom is at present growing AI chips with three very giant prospects, and he expects every of them them to deploy 1 million AI chips in networked clusters by 2027. Tan mentioned the overall market alternative for its AI chips, which it calls XPUs, in addition to components for AI networking may very well be between $60 billion and $90 billion by 2027.
Broadcom mentioned its infrastructure software program division generated $5.82 billion in income for the quarter, practically tripling from final yr’s $1.96 billion. That features a enhance from the $69 billion acquisition of VMware, which was completed after the year-ago quarter.
Broadcom mentioned it could improve its quarterly dividend by 11% in fiscal 2025 to 59 cents per share.
