Broadcom (AVGO.US) gains 4% after beating analyst expectations in its latest earnings, reporting first-quarter revenue of $14.92 billion (vs. a $14.6 billion consensus) and projecting roughly $14.9 billion for the current quarter. AI-related spending was a key driver: management expects $4.4 billion in AI revenue this quarter, fueling investor optimism about ongoing growth in data center infrastructure. The strong results sent Broadcom shares up as much as 13% in premarket trading, reversing some of the year’s earlier losses.
Analysts across the board cited AI demand as the main tailwind for Broadcom’s semiconductor business. Morgan Stanley noted “40%+ quarter-over-quarter growth in Ethernet AI,” while JPMorgan saw “continued strong AI networking demand” that should persist throughout the year. Software revenue also exceeded expectations, at $6.7 billion (3.5% above the consensus), and total profit rose to $1.60 per share, beating estimates of $1.50.
Start investing today or test a free demo
Create account Try a demo Download mobile app Download mobile appEarnings Highlights
- First-Quarter Revenue: $14.92 billion, beating the consensus estimate of $14.6 billion and growing 25% year over year.
- Profit per Share: $1.60 (excluding some items), outpacing the estimated $1.50.
- Outlook for Current Quarter: Revenue projected at about $14.9 billion, above analyst forecasts.
- AI Revenues: Expected to reach $4.4 billion in the current quarter, driven by strong demand for AI-related networking and custom solutions.
- Software Division: Posted $6.7 billion in revenue—3.5% above the consensus estimate.
Market reaction
The share price is up 2% today, and in the initial reaction, gains reached as high as 13%. However, given the negative sentiment in the broader stock market, we are currently seeing a significant reduction in investor enthusiasm.
Source: xStation 5
The content of this report has been created by XTB S.A., with its registered office in Warsaw, at Prosta 67, 00-838 Warsaw, Poland, (KRS number 0000217580) and supervised by Polish Supervision Authority ( No. DDM-M-4021-57-1/2005). This material is a marketing communication within the meaning of Art. 24 (3) of Directive 2014/65/EU of the European Parliament and of the Council of 15 May 2014 on markets in financial instruments and amending Directive 2002/92/EC and Directive 2011/61/EU (MiFID II). Marketing communication is not an investment recommendation or information recommending or suggesting an investment strategy within the meaning of Regulation (EU) No 596/2014 of the European Parliament and of the Council of 16 April 2014 on market abuse (market abuse regulation) and repealing Directive 2003/6/EC of the European Parliament and of the Council and Commission Directives 2003/124/EC, 2003/125/EC and 2004/72/EC and Commission Delegated Regulation (EU) 2016/958 of 9 March 2016 supplementing Regulation (EU) No 596/2014 of the European Parliament and of the Council with regard to regulatory technical standards for the technical arrangements for objective presentation of investment recommendations or other information recommending or suggesting an investment strategy and for disclosure of particular interests or indications of conflicts of interest or any other advice, including in the area of investment advisory, within the meaning of the Trading in Financial Instruments Act of 29 July 2005 (i.e. Journal of Laws 2019, item 875, as amended). The marketing communication is prepared with the highest diligence, objectivity, presents the facts known to the author on the date of preparation and is devoid of any evaluation elements. The marketing communication is prepared without considering the client’s needs, his individual financial situation and does not present any investment strategy in any way. The marketing communication does not constitute an offer of sale, offering, subscription, invitation to purchase, advertisement or promotion of any financial instruments. XTB S.A. is not liable for any client’s actions or omissions, in particular for the acquisition or disposal of financial instruments, undertaken on the basis of the information contained in this marketing communication. In the event that the marketing communication contains any information about any results regarding the financial instruments indicated therein, these do not constitute any guarantee or forecast regarding the future results.
