Investing.com – Broadcom raised its full-year revenue forecast for its artificial intelligence-optimized chips, sending shares of the semiconductor group soaring in premarket trading on Thursday.
Revenue from sales of artificial intelligence-related chips for the California-based company is now projected to be “more than $11 billion,” up from the previous forecast of about $10 billion. Broadcom (NASDAQ:) is a big beneficiary of the boom in artificial intelligence enthusiasm as its advanced network processors, which help move large amounts of data, are used in applications such as OpenAI’s ChatGPT chatbot.
Sales of the company’s AI products were $3.1 billion in the second quarter, up from about $2.3 billion in the previous three-month period.
AllianceBernstein (NYSE:) analysts noted that Broadcom’s current outlook implies AI sales of about $5.6 billion. That figure, they argued, would “grow only about 4% from $5.4 billion in the first half.” and wherein [second-half] mileage approximately $2.8 [billion per quarter]which would actually be less than the approximately $3.1 billion seen in [second quarter]”
When asked by these analysts whether Broadcom expected a conservative growth path for its artificial intelligence business for the rest of the year, CEO Hock Tan suggested the company was seeing some “disorder” in its quarterly shipments.
But he said it was “the best forecast I have at the moment,” adding that “the general trajectory of the trend is this.” […] to become better.”
Meanwhile, the company also announced a ten-for-one stock split to make its shares, which are up more than 37% this year, more accessible to retail investors.
Broadcom reported second-quarter adjusted earnings per share (EPS) of $10.96 on revenue of $12.49 billion. Analysts polled by Investing.com had forecast earnings per share of $10.85 and revenue of $10.85 billion.
Revenue from semiconductor solutions, the company’s core business that includes its custom chip division, rose 6% year-over-year to $7.20 billion. Sales from its infrastructure software segment, which includes cloud computing company VMware (NYSE :), more than doubled and amounted to $5.29 billion.
Yasin Ebrahim contributed to this report.