Broadcom (AVGO) stock surged after the chipmaker reported stronger-than-expected first quarter results and a favorable second quarter outlook, driven largely by sales of its artificial intelligence (AI) chips. CFRA Research senior equity analyst Angelo Zino discussed the company’s earnings in an interview with Yahoo Finance.
Zino attributed Broadcom’s strong performance to its custom AI chip business, which is poised to drive growth over the next few years. He noted that Nvidia’s GPUs have dominated the AI ecosystem, but Broadcom’s custom silicon offerings are a “second alternative” that is gaining traction.
While Broadcom’s current AI-driven sales boost may come with lower corporate gross margins due to the custom silicon business model, Zino believes this will widen over time. The analyst praised Broadcom’s positioning in the market and highlighted its potential for long-term growth. As a result, investors are likely to take note of the company’s positive earnings report.
Source: https://finance.yahoo.com/video/broadcoms-ai-fueled-earnings-beat-230000999.html