Broadcom, a leading chipmaker, has forecast quarterly revenue above Wall Street estimates and predicted booming demand for its custom artificial intelligence chips over the next few years. Shares rose 13% on Friday after CEO Hock Tan revealed plans to capitalize on AI’s growing popularity.
Tan expects $60 billion to $90 billion in revenue from AI-related business by 2027, with three “hyperscale” customers likely to deploy millions of AI chip clusters. This growth is driven by big tech companies seeking to reduce their dependence on pricey and supply-constrained AI processors made by Nvidia.
Demand for Broadcom’s networking chips, which help process vast amounts of data used by applications like OpenAI’s ChatGPT, has also increased as businesses invest in GenAI infrastructure. The company’s AI revenue grew 220% this year.
However, analysts have raised doubts about potential future business from Apple, one of Broadcom’s largest wireless customers, due to the iPhone maker’s plans to design more chips in-house. Despite intense competition from Nvidia, Broadcom remains a key player in the custom AI ASIC market due to its expansion into AI data centers.
The company benefits from growing demand for advanced networking equipment and has diversified through strategic acquisitions, including its $69 billion VMware buyout. Its infrastructure software segment grew 196% year-over-year to $5.82 billion in the fourth quarter.
Source: https://finance.yahoo.com/news/broadcom-forecasts-first-quarter-revenue-212324609.html