Broadcom Stock Jumps 5% After Strong Q1 Results Beat Estimates; AI Revenue Soars to $8.4 Billion

Shares of Broadcom Inc. surged in extended trading after the semiconductor and software giant delivered stronger-than-expected quarterly results, supported by rapidly rising demand for artificial intelligence infrastructure. The upbeat earnings reinforced investor optimism that the global AI boom is continuing to fuel strong growth across the semiconductor industry.

Broadcom Shares Jump After Strong Earnings

Stock of Broadcom climbed about 5.3% in after-hours trading following the release of its fiscal first-quarter results. The rally came as the company reported solid revenue growth and highlighted accelerating demand for AI-related chips and networking technologies.

The chipmaker reported total revenue of $19.31 billion for the quarter, representing a 29% increase year-on-year. The figure slightly exceeded analysts' expectations of $19.26 billion, according to data compiled by FactSet.

AI Business Emerges as Key Growth Driver of Broadcom

Artificial intelligence has become a major growth engine for the company. Broadcom revealed that its AI-related revenue more than doubled from the previous year to $8.4 billion in the first quarter.

Chief Executive Officer (CEO) Hock Tan said the surge was driven by strong demand for the company's custom AI chips and networking products, which are increasingly used in data centers and large-scale computing infrastructure.

"Our AI revenue growth is accelerating," Tan said, adding that AI chip revenue is expected to reach around $10.7 billion in the fiscal second quarter as technology companies continue investing heavily in AI systems.

Infrastructure Software Business Shows Momentum

Apart from its semiconductor business, Broadcom also highlighted improving performance in its infrastructure software segment. The company expects infrastructure-software revenue to grow about 9% year-on-year to $7.2 billion in the second quarter, after recording a more modest 1.4% growth to $6.8 billion in the first quarter.

Tan emphasised that the software division remains resilient despite the rapid rise of AI technologies.

"Let me reinforce that this growth in our infrastructure-software business reflects our focus and investments in foundational infrastructure, and our infrastructure software is not disrupted by AI," he said during the earnings call.

The company projected second-quarter revenue of around $22 billion, which is higher than many Wall Street forecasts.

The company further strengthened shareholder sentiment by announcing a new $10 billion share repurchase program, signaling confidence in its long-term growth prospects.

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