Broadcom Stock Soars on AI Growth Outlook Broadcom's next-generation AI chips, built with advanced 3-nanometer technology, are set to debut in the spring
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American semiconductor manufacturing company Broadcom's stock surged 24.4 per cent on Friday after the company revealed ambitious growth projections for its AI chip business. The chipmaker and software provider forecasts its market opportunity for AI and connectivity chips to grow to USD 60 billion to USD 90 billion by fiscal 2027, a significant leap from its USD 12.2 billion AI revenue in fiscal 2024, which ended November 3.
CEO Hock Tan attributed this growth to increasing demand from Broadcom's major customers, believed to include Google, Meta Platforms, and ByteDance. Broadcom's next-generation AI chips, built with advanced 3-nanometer technology, are set to debut in the spring, potentially giving the company a technological edge over competitors like Marvell Technology.
The company's fiscal fourth-quarter results also impressed investors. Broadcom reported adjusted earnings of USD 1.42 per share, up 28 per cent year over year, on revenue of USD 14.05 billion, a 51 per cent increase. For the current quarter, it forecasts USD 14.6 billion in sales, with AI chip revenue expected to rise 65 per cent to USD 3.8 billion.
Analysts are bullish about Broadcom's prospects, with at least 18 raising their price targets. Bernstein analyst Stacy Rasgon highlighted the company's ability to "give investors a reason to dream," citing additional upside potential from two newly signed customers, reportedly Apple and OpenAI.
