Broadcom issued a strong outlook for the following fiscal year, with the chipmaker’s shares rising in extended trading on Wednesday. For the fourth fiscal quarter, the company projected revenue of $34.8 billion, slightly below analyst expectations of $35.03 billion according to LSEG consensus figures.
During the recently completed quarter, Broadcom demonstrated substantial growth across key metrics. Revenue climbed 86% to $15.95 billion from the prior year, while net income more than tripled to $13.09 billion, or $2.68 per share, compared to $4.14 billion, or 85 cents per share, in the year-ago period. Semiconductor revenue exceeded analyst estimates, reaching $16.7 billion against an average projection of $15.2 billion, though infrastructure software revenue of $8.75 billion came in slightly below the consensus estimate of $8.82 billion.
The company has emerged as a major beneficiary of the artificial intelligence sector’s expansion, designing custom processors for prominent technology firms including Google, Meta, and OpenAI. Chief Executive Officer Hock Tan outlined ambitious growth plans, projecting that the company’s AI revenue would double to $115 billion in fiscal 2027, with plans to double again to $230 billion in fiscal 2028. The company expects to generate over $30 in earnings per share, exceeding LSEG consensus expectations of $25.86 for fiscal 2028.
Tan detailed deployment expectations for multiple custom chips across major AI laboratories. Broadcom anticipates a 1.3 gigawatt deployment of its Jalapeno chip in 2027, with visibility to over 5 gigawatts when including second-generation versions. For Anthropic, the company expects a 5 gigawatt TPU 8i deployment in 2027, with potential for an additional 10 gigawatts. The company plans to deliver tens of billions of dollars in processors to Google annually over several years, while also supporting Meta’s custom MTIA accelerator production. OpenAI is preparing its second-generation chip, with plans underway for a third version in collaboration with Broadcom.
Finance Chief Amie Thuener noted that Broadcom may provide residual value guarantees to support major AI laboratories as they bridge the gap between current cash flows and substantial upfront capital investments. Despite the strong AI business trajectory, Broadcom’s stock performance has trailed broader market indexes this year, gaining approximately 6% compared to a 12% increase in the S&P 500.
Article Attribution | Read More at Article Source
Article summary produced by Claude AI