Broadcom, a California-based chipmaker, has raised its annual revenue forecast for AI-related chips by 10%, expecting $11 billion in revenue from these products by 2024. The company’s stock surged 12% in extended trading following this announcement. With businesses heavily investing in AI applications, Broadcom’s advanced networking chips are in high demand, particularly for applications like OpenAI’s ChatGPT.
In addition to its strong performance in the AI chip market, Broadcom has also seen growth in its custom chips unit, attracting orders from major cloud providers like Google and Meta. The company’s semiconductor solutions segment, which includes networking and custom chips, saw a 6% increase in revenue to $7.20 billion in the second quarter. Analysts believe that Broadcom is well-positioned to benefit from the shift towards AI servers in the data center market, making it a key player alongside industry leader Nvidia.
Broadcom’s stock has seen significant growth, with a more than 30% rally this year and plans for a 10-for-1 forward stock split to make shares more accessible to retail investors. The company raised its full-year revenue forecast to $51 billion and exceeded analysts’ estimates for second-quarter earnings per share and revenue. With a strong position in the AI chip market and growing demand for custom chips, Broadcom is poised for continued success in the semiconductor industry.