Broadcom (AVGO) This autumn 2024 Earnings Report

Broadcom on Thursday reported better-than-expected fourth-quarter outcomes and mentioned synthetic intelligence income for the yr greater than tripled.

Shares of the chipmaker jumped after Broadcom CEO Hock Tan mentioned the corporate was growing customized AI chips with three main cloud clients. Shares rose 13% in prolonged buying and selling.

Listed here are Broadcom’s outcomes in comparison with LSEG consensus estimates for the quarter ending November 3:

• Earnings per share: $1.42, adjusted from $1.38 anticipated
• Revenue: $14.05 billion versus $14.09 billion anticipated

Broadcom mentioned it expects first-quarter income of about $14.6 billion, simply above analysts’ common estimate of $14.57 billion. For the fourth quarter, year-over-year income elevated 51%, from $9.3 billion.

Fourth-quarter web revenue was $4.32 billion, or 90 cents per share, up 23% from $3.52 billion, or 83 cents per share, in the identical quarter a yr in the past. earlier.

In its semiconductor options group, which incorporates the corporate’s synthetic intelligence chips, income rose 12 p.c to $8.23 billion from $8.03 billion a yr earlier. is one yr outdated.

Broadcom is seeing rising demand because of the growth in generative AI infrastructure. For the yr, the corporate mentioned AI income jumped 220% to $12.2 billion. A part of this progress comes from Ethernet community parts, that are used to attach hundreds of AI chips.

“We see alternative in AI over the subsequent three years,” Tan instructed traders throughout the earnings convention name. “Many particular hyperscalers have began their respective journeys to develop their very own customized AI accelerators.”

Tan mentioned Broadcom is at present growing AI chips with three very massive clients, and he expects every of them to deploy 1 million AI chips in networked clusters by 2027. Tan mentioned the The entire market alternative for its AI chips, which it calls XPU, is that components for AI networks may value between $60 billion and $90 billion by 2027.

Broadcom mentioned its infrastructure software program division generated $5.82 billion in income for the quarter, practically triple final yr’s $1.96 billion. This consists of the enhance from the $69 billion acquisition of VMware, which was completed after final yr’s quarter.

Broadcom introduced it could enhance its quarterly dividend by 11% in fiscal 2025, to 59 cents per share.

WATCH: Broadcom shares soar on earnings