Broadcom Beats Q1 Estimates, Forecasts $100B AI Revenue by 2027

Broadcom Inc. reported robust fiscal first-quarter results after the market close on Wednesday, easing investor worries about a potential slowdown in artificial intelligence infrastructure spending and forecasting AI chip revenue to surpass $100 billion by 2027. The semiconductor and infrastructure software company posted revenue of $19.31 billion for the quarter ended early February, a 29 percent increase from the previous year that topped analyst expectations of $19.26 billion.

Adjusted earnings per share came in at $2.05, exceeding forecasts of $2.03, while earnings before interest, taxes, depreciation and amortization reached $13.13 billion, or 68 percent of revenue. The semiconductor segment drove the outperformance, with revenue surpassing estimates by 0.9 percent, fueled by $8.4 billion in AI-related sales. The software division, however, fell short of projections by 2.8 percent. Operating margins hit 66.4 percent, above the anticipated 65.7 percent.

Executives attributed the strength to surging demand for custom AI chips and networking components used in large-scale data centers. Broadcom highlighted partnerships with major AI players, including plans to supply 3...