Broadcom Surges After Exceeding Earnings Expectations: What Investors Should Know

Broadcom (NASDAQ:AVGO) shares surged 8% in extended trading on Thursday. This happened after the semiconductor and software giant’s first-quarter results and guidance exceeded expectations. The results show continued robust spending on artificial intelligence.

For the quarter ending February 2, Broadcom reported adjusted earnings per share of $1.60, with revenue increasing 25% year-over-year to $14.92 billion. The company’s semiconductor solutions revenue reached $8.21 billion, while infrastructure revenue totaled $6.7 billion.

Analysts had anticipated Broadcom to report adjusted earnings per share of $1.50 on revenue of $14.61 billion.

“Broadcom’s record-breaking first-quarter revenue and adjusted EBITDA were fueled by both AI semiconductor solutions and infrastructure software. Q1 AI revenue surged 77% year-over-year to $4.1 billion, while infrastructure software revenue climbed 47% year-over-year to $6.7 billion,” stated Broadcom CEO Hock Tan.

“We foresee continued strength in AI semiconductor revenue of $4.4 billion in Q2, as hyperscale partners persist in investing in AI XPUs and connectivity solutions for AI data centers.”

Broadcom manufactures application-specific integrated circuits for many high-profile clients, including Alphabet, Meta, ByteDance, and others.