The stock of U.S. chipmaker Broadcom (AVGO) is up 14% after the company announced strong forward guidance, propelled by sales of its artificial intelligence (A.I.) technology.
Silicon Valley-based Broadcom announced fiscal fourth-quarter earnings per share (EPS) of $1.42 U.S., which was ahead of the $1.38 U.S. expected on Wall Street.
Revenue in the period came in at $14.05 billion U.S., which was slightly below the $14.09 billion U.S. expected among analysts. However, revenue increased 51% from a year earlier.
The chipmaker’s stock jumped after Broadcom’s management team said the company is developing custom A.I. chips with three large cloud customers, though no names were provided.
In Broadcom’s semiconductor solutions group, which includes it’s A.I. microchips, revenue increased 12% to $8.23 billion U.S. from $8.03 billion U.S. a year ago.
Management said they are seeing soaring demand from the boom in A.I. infrastructure. For the just completed fiscal year, Broadcom’s A.I. revenue rose 220% to $12.20 billion U.S.
Broadcom also said its infrastructure software division generated $5.82 billion U.S. in revenue for the quarter, nearly tripling from last year’s $1.96 billion U.S.
That growth comes partly from the company’s $69 billion U.S. acquisition of VMware, which was completed a year ago.
Looking ahead, Broadcom’s leadership team said they expect fiscal first-quarter revenue of $14.60 billion U.S., which is ahead of the $14.57 billion U.S. average analyst estimate.
Broadcom is currently developing A.I. microchips with three large customers and expects each of them to deploy one million A.I. chips in networked clusters by 2027.
Lastly, Broadcom announced that it is increasing its quarterly dividend payment to shareholders by 11% to $0.59 U.S. per share.
Prior to today (Dec. 13), the stock of Broadcom had risen 67% on the year to trade at $180.66 U.S. per share.
