The mixed result reflects both Broadcom’s strength in the AI hardware race and investors’ concerns about future growth. In the first quarter, the company’s AI revenue quadrupled from a year ago. CEO Hock Tan revealed a particularly lucrative segment of this growth: developing custom AI chips for large customers. Broadcom expects $7 billion to come from just two of these partnerships.
But investors were expecting a bolder statement about future growth. While Broadcom’s $50 billion revenue forecast represents 40 percent growth, it fell short of expectations driven by the stock’s recent rally on AI optimism. This cautious outlook, combined with Broadcom facing competition from Nvidia in the custom chip market, caused the stock price to fall slightly in after-hours trading.
Source: Ferra
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