Broadcom announced third-quarter financial results that surpassed analyst expectations and issued an optimistic revenue forecast for the current quarter, driven by surging demand for its artificial intelligence products. Despite the strong report, the company’s stock was little changed in extended trading.
The chipmaker reported adjusted earnings of $1.69 per share on revenue of $15.96 billion. This exceeded LSEG consensus estimates, which had projected $1.65 per share and revenue of $15.83 billion. The third-quarter revenue represents a 22% increase year-over-year.
For the upcoming fourth quarter, Broadcom expects revenue of approximately $17.4 billion, ahead of the $17.02 billion anticipated by Wall Street.
The company’s net income reached $4.14 billion, or 85 cents per share, a significant turnaround from the net loss of $1.88 billion, or 40 cents per share, recorded in the same period last year.
CEO Hock Tan attributed the robust revenue growth to strong performance from custom AI accelerators, networking parts, and the VMware software business. Revenue specifically from AI products surged 63% to $5.2 billion in the quarter.
Breaking down the results by segment, chip sales, reported as semiconductor solutions, rose 57% to $9.17 billion. The infrastructure software business, which includes VMware, saw revenue climb 43% to $6.79 billion.
Broadcom develops custom chips for major cloud companies like Google, in addition to critical networking components and software used to connect large-scale AI systems. Investor optimism about the company’s potential to challenge Nvidia’s market share in AI chips has fueled significant stock growth. As of Thursday’s close, Broadcom shares are up 32% for the year and have almost doubled over the past 12 months, elevating its market capitalization past $1.4 trillion.
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