Broadcom Exceeds Fourth-Quarter Earnings Expectations with AI Revenue Surging
Broadcom announced better-than-expected fourth-quarter earnings on Thursday, revealing that its artificial intelligence revenue for the year had more than tripled. The chipmaker’s stock saw a slight increase in after-hours trading following the positive results.
Here is a breakdown of how Broadcom performed compared to the LSEG consensus estimates for the quarter ending on Nov. 3:
Broadcom anticipates first-quarter revenue to be around $14.6 billion, slightly above the average analyst estimate of $14.57 billion. Year-over-year revenue for the fourth quarter surged by 51%, rising from $9.3 billion to $14.1 billion.
In the fourth quarter, the net income stood at $4.32 billion, or 90 cents per share, marking a 23% increase from the previous year’s $3.52 billion, or 83 cents per share.
Within its semiconductor solutions group, which encompasses the company’s AI chips, revenue grew by 12% to $8.23 billion from $8.03 billion in the corresponding period last year.
Broadcom is experiencing a surge in demand driven by the flourishing generative AI infrastructure. The company reported a 220% increase in AI revenue for the year, amounting to $12.2 billion. A substantial portion of this growth is attributed to ethernet networking components utilized in connecting numerous AI chips.
The infrastructure software division of Broadcom saw a significant revenue spike, reaching $5.82 billion for the quarter, nearly tripling from the previous year’s $1.96 billion. This growth includes contributions from the acquisition of VMware for $69 billion, which was finalized after the same quarter last year.
Broadcom also announced plans to raise its quarterly dividend by 11% in fiscal 2025 to 59 cents per share.
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