(Reuters) -Broadcom forecast its first-quarter income above Wall Road estimates on Thursday, betting on booming demand for its customized synthetic intelligence chips and networking gear from cloud suppliers doubling down on GenAI infrastructure adoption.
Shares of the Palo Alto, California-based firm rose over 3% in prolonged buying and selling, having gained about 60% thus far this yr as one of many largest beneficiaries of a rally in AI-linked shares.
Huge tech has been vying to scale back its dependence of dear, supply-constrained AI processors made by front-runner Nvidia, serving to Broadcom which makes superior customized synthetic intelligence chips for so-called hyperscalers.
Demand for Broadcom’s networking chips that assist transfer round huge quantities of knowledge utilized by functions comparable to OpenAI’s ChatGPT has additionally elevated, as companies double down on investments in GenAI infrastructure.
The corporate forecast income of about $14.6 billion for the primary quarter, in contrast with analysts’ common estimate of $14.57 billion in keeping with knowledge compiled by LSEG.
Although the corporate faces intense competitors from Nvidia’s ethernet-like Infiniband merchandise, Broadcom nonetheless advantages from the growth of AI knowledge facilities because it is among the largest suppliers of superior networking gear.
Whereas hailed as a chipmaker, Broadcom has proliferated right into a tech conglomerate owing to buyouts comparable to its $69 billion acquisition of cloud-computing agency VMware. The infrastructure software program section grew 196% to $5.82 billion within the fourth quarter.
The corporate reported fourth-quarter income of $14.05 billion, in contrast with expectations of $14.09 billion.
On an adjusted foundation, Broadcom earned $1.42 per share in contrast with estimates of $1.38 per share.
(Reporting by Arsheeya Bajwa and Zaheer Kachwala in Bengaluru; Modifying by Krishna Chandra Eluri)
