Broadcom (AVGO) posted stronger-than-expected second-quarter earnings Thursday, thanks in part to ongoing demand for its AI-focused, next-generation chips, and said current-quarter revenue would continue to expand.
Broadcom's adjusted earnings of $10.32 per share, 7.9% higher than a year earlier, topped Wall Street forecasts by around 24 cents, while revenue rose 7.8% to an analyst-beating $8.73 billion. Current-quarter revenue, the group said, should come in at around $8.85 billion.
Semiconductor solutions revenue grew 9% from a year earlier to $6.81 billion while its infrastructure software business saw sales rise 3% to $1.93 billion.
AI-related revenue, Broadcom said, now makes up around 15% of overall chip sales, a figure that company said could rise to 20% over the coming quarters.
Q3 Outlook: Growth Compared With a Year Earlier
"Broadcom's second quarter results were driven by demand for next generation technologies from hyperscale, while enterprise and service providers continued to sustain," said CEO Hock Tan.
"Our third-quarter outlook projects year-over-year growth, reflecting continued leadership in networking as we support a measured ramp into large scale AI networks."
Broadcom shares were marked 4.2% higher in after-hours trading immediately following the earnings release to indicate a Friday opening bell price of $823.10 each.
"Consolidated revenue grew 8% year-over-year to $8.7 billion and adjusted Ebitda margin increased year-over-year to 65%," Chief Financial Officer Kirsten Spears said. "We generated $4.4 billion in free cash flow, and expect cash flows to remain strong for Q3."
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