Broadcom reported better-than-expected earnings and revenue and issued a strong forecast for the current period, as the chipmaker continues to benefit from the artificial intelligence boom. The stock rose 5% in extended trading on Wednesday.
“We have vision to achieve AI revenue from chips, just chips, in excess of $100 billion in 2027,” Broadcom CEO Hock Tan said on a conference call with analysts. “We have also secured the supply chain necessary to achieve this.”
Here’s how the company performed compared to the LSEG consensus:
- Earnings per share: $2.05 adjusted versus $2.03 estimated
- Revenue: $19.31 billion vs. $19.18 billion estimated
Revenue increased 29% year over year during the fiscal first quarter, which ended Feb. 1, according to a statement.
Net income rose to $7.35 billion, or $1.50 per share, from $5.5 billion, or $1.14 per share, in the year-earlier quarter. Adjusted earnings exclude stock-based compensation and tax adjustments.
For the second quarter, Broadcom said it anticipates an adjusted profit margin of 68%, higher than StreetAccount’s 66% consensus. The company said it expects $22 billion in revenue, beating the average estimate of $20.56 billion, according to LSEG.
The guidance includes $14.8 billion in semiconductor solutions revenue, higher than StreetAccount’s consensus of $13.06 billion.
Broadcom helps other companies translate their chip designs into silicon, providing them with intellectual property and backend technologies before companies like Taiwan Semiconductor Manufacturing Company. It is a role that has been gaining importance as Amazon, Google, Goal and microsoft design custom chips.
AI revenue soared 106% from a year earlier to $8.4 billion, “driven by strong demand for custom AI accelerators and AI networks,” CEO Hock Tan said in the statement. Tan had projected a doubling of AI revenue in December.
Broadcom reported $12.52 billion in semiconductor solutions revenue, higher than the $12.25 billion expected by analysts surveyed by StreetAccount. During the quarter, Broadcom announced new Wi-Fi 8 chips.
For infrastructure software, Broadcom said it generated $6.8 billion in revenue, less than StreetAccount’s $7.02 billion consensus.
In recent weeks, investors have become increasingly concerned that generative AI models could pose competitive threats to mature software companies. The iShares Expanded Tech-Software Sector ETF is down about 19% so far this year.
“Our infrastructure software is not affected by AI,” said Tan, whose company acquired server virtualization software company VMware in 2023.
Broadcom said its board authorized up to $10 billion in new share buybacks through 2026.
In December, Tan said Anthropic had placed an order for custom chips worth $10 billion. Last week, US Defense Secretary Pete Hegseth said the Pentagon would label Anthropic a “national security supply chain risk” and President Donald Trump ordered government agencies to stop using Anthropic after the artificial intelligence startup refused to allow the use of its technology for mass domestic surveillance or fully autonomous weapons.
During Wednesday’s conference call, Tan called for one gigawatt of Google Tensor Processing Units for Anthropic in 2026 and more than three gigawatts in 2027.
OpenAI should deploy more than a gigawatt of its first-generation custom chip in 2027, Tan said.
He said Broadcom would see benefits GoalThe MTIA custom accelerator, despite analysts’ doubts about the future of Meta’s custom silicon program.
“MTIA’s roadmap is alive and well,” Tan said, adding that it is already shipping and that Meta is targeting multiple gigawatts of custom accelerator capacity in 2027 and beyond.
Advanced packaging, the next step in the chip manufacturing process after the silicon leaves the manufacturing line, is another area in which Broadcom is investing. Chips are typically connected to a base layer with layers of copper to allow them to send electrical signals to larger systems, such as circuit boards. On the earnings conference call, Tan said Broadcom is investing in glass substrates, a new technology that helps improve that electrical signal as AI systems grow.
Nvidia has reserved most of TSMC’s more advanced wafer-on-substrate, or CoWoS, chip packaging capacity, raising concerns about a bottleneck as demand for AI chips shows no signs of slowing. “We have very good partners with this key component,” Tan said.
As of Wednesday’s close, Broadcom shares were down 8% so far in 2026, while the S&P 500 index was flat.
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