AI Revenue More Than Doubled — Tan Says He Called It
However, standing out amongst all the numbers in the earnings report was AI-related revenue. It more than doubled compared to last year, prompting CEO Hock Tan to credit the performance to robust demand for custom AI-accelerators and AI networking products. Tan also said that the result fulfilled a target he had set publicly several months earlier.
Guidance Is the Best Part — AI Revenue Expected to Climb Further
Here’s the best part for a technology market that has been screaming recently for solid guidance. Tan signaled that Broadcom’s AI semiconductor revenue is expected to climb even further in the current quarter, citing continued momentum in demand from hyperscale cloud customers.
Not Glamorous but Absolutely Essential
In case you were wondering what Broadcom actually does in the AI space, think of it as the behind the scenes partner that helps the big tech companies turn their custom chip ideas into real products. It doesn’t make the chips itself, but it provides the intellectual property and the technology that gets those designs ready for the fabrication plant. Not glamorous, but absolutely essential.
That’s a Big Pond to Be Swimming In
Broadcom is also stepping up its competition with Amazon, Google, Meta and Microsoft, all of whom are racing to build their own proprietary chips to support their AI ambitions. That’s a big pond to be swimming in.
Buyback Program Signals Confidence in What Lies Ahead
If the earnings and outlook weren’t enough, Broadcom’s board also authorized a major new share buyback program running through the end of next year. When a company buys back its own stock, it usually means they like what they see ahead.
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