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Broadcom Beats Second-Quarter Views as AI Revenue More Than Doubles

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Broadcom Beats Second-Quarter Views as AI Revenue More Than Doubles

Broadcom (AVGO) late Wednesday reported fiscal second-quarter results above Wall Street's estimates as the chip designer's artificial intelligence revenue more than doubled on the back of increased demand for custom accelerators and networking solutions.

Adjusted earnings rose to $2.44 a share during the quarter through May 3 from $1.58 a year earlier, coming in ahead of the FactSet-polled consensus indicating $2.40. Revenue advanced 48% to $22.19 billion, above the Street's $22.13 billion view.

AI semiconductor revenue soared 143% year-on-year to $10.8 billion, driven by custom accelerators and networking, Broadcom Chief Executive Hock Tan said in a statement.

"Broadcom achieved record revenue, operating profit and free cash flow in (the second quarter), driven by accelerating growth in AI semiconductor revenue and strong operating leverage," Tan said.

The semiconductor solutions division's sales climbed 79% to $15.01 billion, while the infrastructure software segment increased 9% to $7.18 billion.

For the third quarter, Broadcom anticipates total revenue growth of 84%, to about $29.4 billion, compared with the consensus estimate of $28.25 billion.

AI semiconductor revenue is seen climbing more than 200% year-over-year to $16 billion in the third quarter, Tan said.

Broadcom's stock fell 6.7% in after-hours trading, and had gained 38.5% this year through Wednesday close.

Advanced Micro Devices (AMD), Marvell Technology (MRVL) and Nvidia (NVDA) all beat revenue estimates in the most recent quarter, fueled by an ongoing AI boom that is driving unprecedented demand for data centers.

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