Broadcom reported better-than-expected fourth-quarter earnings, driven by soaring demand for generative AI infrastructure. The chipmaker’s artificial intelligence revenue increased 220% to $12.2 billion, more than tripling from the previous year.
Revenue came in slightly below expectations at $14.05 billion, but Broadcom expects first-quarter revenue of $14.6 billion, just ahead of analyst estimates. Net income rose 23% to $4.32 billion, or 90 cents per share.
The company’s semiconductor solutions group, which includes AI chips, saw a 12% increase in revenue to $8.23 billion from last year. Broadcom is developing custom AI chips with three large cloud customers and expects each to deploy 1 million AI chips by 2027.
CEO Hock Tan highlighted the opportunity in AI, stating that massive hyperscalers are developing their own custom AI accelerators. The total market opportunity for Broadcom’s AI chips, or XPUs, could be between $60 billion and $90 billion by 2027.
Broadcom’s infrastructure software division generated $5.82 billion in revenue, nearly tripling from last year, thanks to the $69 billion acquisition of VMware. The company will increase its quarterly dividend by 11% to 59 cents per share in fiscal 2025.
Source: https://www.cnbc.com/2024/12/12/broadcom-avgo-earnings-report-q4-2024-.html