Key Takeaways

AI-related revenue at Broadcom more than doubled during Q1, reaching $8.4 billion thanks to strong sales of custom AI accelerators and networking solutions.
CEO Hock Tan forecasted that AI chip revenue will surpass $100 billion annually by 2027.
First quarter adjusted earnings per share reached $2.05, surpassing analyst expectations of $2.03; total revenue of $19.31 billion exceeded projections.
Management issued Q2 revenue guidance of approximately $22 billion, significantly higher than the Street’s ~$20.5 billion estimate.
A fresh $10 billion share repurchase program was unveiled, with supply commitments locked through 2028.

Shares of Broadcom advanced approximately 5% during Thursday’s session following robust first-quarter financial results and an optimistic long-term AI growth outlook presented by CEO Hock Tan.

Broadcom Inc., AVGO

The rally followed Broadcom’s report of adjusted earnings reaching $2.05 per share, narrowly beating the Wall Street consensus of $2.03. Total revenue reached $19.31 billion, marking a 29% increase from the prior year and exceeding analyst expectations of $19.18 billion.

The second-quarter outlook proved particularly impressive. Management projected revenue near $22 billion for the upcoming quarter — substantially above the analyst consensus of $20.5 billion.

Artificial intelligence revenue emerged as the standout metric. The segment more than doubled during the period to reach $8.4 billion, propelled by robust demand for customized AI accelerators and networking hardware.

According to Tan, the customer base has expanded beyond established hyperscale cloud providers. Organizations developing AI agents, automated code generation platforms, and consumer-facing AI applications are increasingly adopting Broadcom’s specialized chip solutions.

The company’s AI semiconductor partnerships include major technology giants such as Alphabet, Meta, OpenAI, and Anthropic.

During the analyst call, Tan expressed confidence that the company has clear “line of sight” to annual AI chip revenue surpassing $100 billion by 2027 — a projection that exceeded even the most bullish Street forecasts.

JPMorgan analysts project the company could generate between $12 billion and $15 billion for each gigawatt of AI infrastructure capacity by 2027. Their revised AI revenue projections “conservatively” reach $120 billion or higher.

Analysts at Goldman Sachs highlighted that Broadcom’s “leadership in AI networking and custom silicon enables the lowest inference cost for its hyperscaler customers.”

Supply Agreements and Profitability

Investor concerns about high-bandwidth memory constraints were prominent heading into earnings. Tan directly addressed these worries, confirming that Broadcom has locked in memory supply and advanced semiconductor wafer capacity extending through 2028.

He also dismissed profitability concerns related to increased AI chip rack shipments. According to Tan, the company has optimized production yields and costs to the point where AI business margins are “fairly consistent” with its broader semiconductor portfolio.

The company is approaching 10 gigawatts of deployed capacity distributed across six major customers — a diversification metric that helped alleviate investor worries about customer concentration.

Capital Returns and Street Sentiment

Complementing the earnings report, Broadcom unveiled a new $10 billion stock repurchase authorization, signaling management confidence in the business trajectory.

Wall Street currently rates the stock as a consensus Strong Buy based on input from 30 analysts — comprising 28 Buy ratings and 2 Hold ratings — with a mean price target of $449.46.

Broadcom’s impressive performance created positive ripple effects across related semiconductor names. Credo Technology shares surged 10% while Amphenol climbed 4%, reflecting investor enthusiasm for copper-based connectivity solutions over optical alternatives in AI server architectures.

Tan indicated that AI chip revenue for the current quarter should reach $10.7 billion, signaling continued growth momentum.

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Filed under: Bitcoin - @ March 5, 2026 7:28 pm