Shares of Broadcom climbed Thursday after the semiconductor and software company reported stronger-than-expected quarterly results and issued an optimistic outlook for its artificial intelligence business, signaling continued momentum in the rapidly expanding AI infrastructure market.
The company posted adjusted earnings of $2.05 per share for its fiscal first quarter, slightly beating analysts’ expectations of $2.03 per share, according to FactSet. Revenue came in at $19.31 billion, also edging past forecasts of $19.26 billion and marking a 29 percent increase from the same period last year. Investors responded positively to the results, sending Broadcom’s stock up 2.6 percent in early Thursday trading to $335.79.
The upbeat reaction stood out at a time when even the AI chip industry’s dominant player, Nvidia, has struggled to impress Wall Street despite strong financial results. Analysts noted that investor enthusiasm around Broadcom was largely driven by the company’s aggressive revenue forecast and its growing role in the AI hardware ecosystem.
Broadcom said it expects second-quarter revenue of approximately $22 billion, well above the consensus estimate of $20.5 billion, according to Barron’s. Chief executive Hock Tan also told investors that the company has “line of sight” to artificial intelligence sales surpassing $100 billion by 2027, indicating strong long-term demand for AI infrastructure.
“Following the disappointing market reception of Nvidia’s stronger-than-projected results and outlook, the Street was poised for Broadcom’s shares to react with similar lethargy,” Benchmark Research analyst Cody Acree wrote in a note cited by Barron’s. “However, Broadcom stock rose…with investors most notably impressed by the company’s much higher second-quarter outlook and its forecast for its AI revenue to grow to significantly more than $100 billion next year.”
Broadcom operates across two major business segments: semiconductors and infrastructure software. The company’s semiconductor solutions unit generated $12.52 billion in revenue during the quarter, slightly exceeding Wall Street’s expectation of $12.4 billion. Meanwhile, its infrastructure software segment brought in $6.8 billion in revenue, narrowly missing forecasts of $6.99 billion.
Despite the slight shortfall in software revenue, investor concerns about the segment appear to be easing. Tan said Broadcom’s infrastructure software business is not being significantly disrupted by artificial intelligence, addressing fears that AI could slow growth in the division.
The strongest momentum for the company is coming from AI-related hardware. Broadcom designs custom chips used by major technology companies to power large-scale artificial intelligence systems. One prominent example is the Tensor Processing Units developed by Google. These specialized processors are designed to train and run AI models more efficiently.
Broadcom said demand for Google’s newest Ironwood TPU generation has been strong this year, and the company expects future versions—potentially arriving by 2027—to drive further growth. In certain applications, TPUs can offer a more cost-efficient alternative to the graphics processing units, or GPUs, that currently dominate the AI computing market.
This shift is helping position Broadcom as a credible competitor to Nvidia in the race to supply critical hardware for artificial intelligence systems.
“The momentum of Google and its success and scale around TPU is showing up in Broadcom’s numbers while it also continues to deliver across its broad network and software portfolio,” said Daniel Newman, chief executive of technology research firm The Futurum Group, in comments to Barron’s.
As demand for AI infrastructure continues to surge globally, Broadcom’s combination of custom chip design and enterprise software could place it in a strong position to capture a growing share of the market, particularly as major technology companies invest heavily in building the next generation of AI systems.