Investing.com – Broadcom on Thursday issued upbeat income forecasts for the present quarter and predicted booming demand for its customized AI chips over the following few years, sending its shares hovering in prolonged buying and selling.
Shares of Broadcom Inc (NASDAQ:) jumped greater than 14% in premarket buying and selling Friday.
For the quarter ended November 3, the chipmaker reported earnings per share (EPS) of $1.42 on income of $14.05 billion. Analysts surveyed by Investing.com forecast EPS of $1.39 on income of $14.07 billion.
Semiconductor options, its core enterprise, jumped 12% to $8.23 billion, whereas infrastructure software program rose 196% to $5.82 billion.
For 2024, semiconductor revenues hit a “report $30.1 billion, pushed by AI income of $12.2 billion,” the corporate stated. “AI income, which grew 220% year-over-year, was pushed by our main portfolio of XPU AI and Ethernet networks,” he provides.
Trying forward, the chipmaker stated it expects first-quarter income of $14.6 billion, above the consensus of $14.55 billion.
However the largest takeaway from the earnings name, in line with Jefferies analysts, was administration’s rising confidence that the addressable market (SAM) for its three AI ASIC prospects is anticipated to succeed in $60 billion to $90 billion. by FY 2027 (January), based mostly on forecasts. on buyer roadmaps and plans.
“This might be the case if all three moved to ASICs quite than GPUs for coaching clusters, which isn’t a assure, however it highlights the size of the ASIC alternative. SAM would develop extra if it gained the two further hyperscale prospects,” observe the analysts. .
“General, we have been a bit of too cute on short-term positioning, however we anticipate buyers to return to the identify, given the higher near-term readability on AI income and substantial long-term potential of 1M xPU clusters,” they stated. added.
Jefferies raised the value goal on AVGO from $205 to $225.
Individually, analysts at Cantor Fitzgerald raised their worth goal from $225 to $250 and reiterated Broadcom as their prime choose.
“It’s clear to us that Broadcom is a transparent beneficiary of AI with a powerful expertise roadmap that ought to proceed to ship robust earnings development,” the corporate wrote.
Yasin Ebrahim contributed to this report.
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