By Juby Babu
Dec 11 (Reuters) – Broadcom on Thursday projected first-quarter revenue above Wall Street estimates, betting that sustained, robust demand for its specialized artificial intelligence chips would power another year of growth and help quell investor worries of a spending slowdown.
Shares of the Palo Alto, California-based company rose over 2% in extended trading.
Broadcom CEO Hock Tan said in a statement that Broadcom’s AI semiconductor revenue – which encompasses both the custom chips it helps firms such as Google to build, as well as networking chips used in AI data centers – is expected to double to $8.2 billion in the fiscal first quarter.
The company has emerged as a major beneficiary of the technology industry’s rush to build out AI capabilities. The company supplies high-speed networking chips, such as its Tomahawk and Jericho series, that are critical for moving vast amounts of data within AI data centers.
“Given Google’s position, Broadcom stands to benefit from increased interest in specialized, energy-efficient chips, while its networking portfolio makes it a key supplier for the massive data center buildouts powering AI infrastructure,” said Emarketer analyst Jacob Bourne.
Broadcom works with hyperscale cloud providers such as Google and Meta Platforms to design and manufacture custom AI processors, known as ASICs, providing a key alternative to Nvidia’s GPUs.
Broadcom forecast revenue of about $19.1 billion for the quarter, compared with analysts’ average estimate of $18.27 billion, according to data compiled by LSEG.
The company reported revenue of $18.02 billion for the fourth quarter ended November 2, compared with analysts’ average estimate of $17.49 billion.
(Reporting by Juby Babu in Mexico City; Editing by Maju Samuel)
