broadcom The chipmaker continues to benefit from the artificial intelligence boom, reporting better-than-expected revenue and revenue and issuing a strong outlook for the current fiscal year. Shares rose 5% in extended trading Wednesday.
“We expect AI revenue from chips alone to exceed $100 billion in 2027,” Broadcom CEO Hock Tan said on a conference call with analysts. “We have also secured the necessary supply chain to achieve this.”
Here is the company’s performance compared to the LSEG consensus:
Earnings per share: $2.05 adjusted vs. $2.03 estimated Revenue: $19.31 billion vs. $19.18 billion estimated
Sales for the first quarter of the fiscal year ended February 1 were up 29% compared to the same period last year, the statement said.
Net income increased to $7.35 billion, or $1.50 per share, from $5.5 billion, or $1.14 per share, in the year-ago period. Adjusted earnings exclude stock-based compensation and tax adjustments.
Broadcom said it expects adjusted profit margin to be 68% for the second quarter, beating the Street consensus of 66%. The company expects sales of $22 billion, beating the average estimate of $20.56 billion, LSEG said.
The guidance includes semiconductor solutions revenue of $14.8 billion, above the StreetAccount consensus of $13.06 billion.
Broadcom helps other companies convert their chip designs into silicon, providing intellectual property and back-end technology before the chips go to chip manufacturing plants from companies such as: Taiwan semiconductor manufacturing company. This is a role that is considered important, so Amazon, google, Meta and microsoft Design customized chips.
AI revenue increased 106% year over year to $8.4 billion, “driven by strong demand for custom AI accelerators and AI networking,” CEO Hock Tan said in a statement. Tan expected AI revenue to double in December.
Broadcom reported revenue from semiconductor solutions of $12.52 billion, which exceeded the $12.25 billion expected by analysts surveyed by Street Account. During the quarter, Broadcom announced a new Wi-Fi 8 chip.
Regarding infrastructure software, Broadcom reported revenue of $6.8 billion, which was below the consensus of $7.02 billion from Street accounts.
In recent weeks, investors have grown concerned that generative AI models could pose a competitive threat to mature software companies. The iShares Extended Tech Software Sector Exchange Traded Fund is down about 19% since the beginning of the year.
“Our infrastructure software will not be destroyed by AI,” said Tan, whose company acquired server virtualization software company VMware in 2023.
Broadcom announced that its board of directors has authorized up to $10 billion in stock buybacks through 2026.
Tan said in December that Anthropic had ordered $10 billion worth of custom chips. Last week, Secretary of Defense Pete Hegseth said the Pentagon would call Anthropic a “supply chain risk to national security,” and President Donald Trump directed the agency to halt its use of Anthropic after the AI startup refused permission to use its technology for domestic mass surveillance or fully autonomous weapons.
During Wednesday’s conference call, Tan called for more than 1 gigawatt of Google tensor processing equipment for Anthropic in 2026 and 3 gigawatts in 2027.
OpenAI should deploy more than 1 gigawatt of first-generation custom chips in 2027, Tan said.
He said Broadcom would benefit from: MetaThe MTIA custom accelerator was developed even as analysts have doubts about the future of Meta’s custom silicon program.
“MTIA’s roadmap is alive and well,” Tan said, adding that it is currently shipping and Meta is targeting multi-gigawatts of custom accelerator capacity from 2027 onwards.
Advanced packaging, the next step in the chip manufacturing process after silicon leaves the manufacturing line, is another area Broadcom is investing in. Chips are typically connected to a base layer with a layer of copper, allowing the chip to send electrical signals to a larger system, such as a circuit board. Tan said during the earnings call that Broadcom is investing in glass substrates. This is a new technology that will help improve electrical signals as AI systems grow.
Nvidia has secured most of TSMC’s cutting-edge chip-on-wafer-on-substrate (CoWoS) packaging capacity, raising concerns about bottlenecks as demand for AI chips shows no signs of slowing. “We have very good partners for this critical component,” Tan said.
As of Wednesday’s close, Broadcom stock was down 8% so far in 2026, while the S&P 500 index was flat.
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