Broadcom reported fiscal third-quarter earnings that beat expectations and provided robust guidance for the current quarter. The stock was little changed in extended trading.
Here's how the chipmaker did versus LSEG consensus estimates:
- Earnings per share: $1.69 adjusted vs. $1.65 expected
- Revenue: $15.96 billion vs. $15.83 billion expected
Broadcom said it expects $17.4 billion in fourth-quarter revenue, higher than the $17.02 billion expected by Wall Street analysts. Revenue in the third quarter rose 22% on an annual basis.
The company reported net income of $4.14 billion, or 85 cents per share, after recording a net loss a year ago of $1.88 billion, or 40 cents per share. The loss in the year-ago period was due to a one-time tax provision of $4.5 billion that resulted from the company transferring intellectual property to the U.S.
Broadcom develops custom chips for Google and other cloud companies, in addition to networking parts and software needed to tie thousands of artificial intelligence chips together.
Broadcom shares are up 32% for the year as of Thursday's close and have almost doubled in the past 12 months, lifting the company's market cap past $1.4 trillion.
Investors are optimistic that the company's custom chips may in the coming years threaten Nvidia's dominant market share in AI chips. In March, Broadcom CEO Hock Tan said the company was developing new AI chips with three large cloud customers, and said he expected the company's AI growth to continue through next year.
Tan attributed the company's third-quarter revenue growth to its custom AI accelerators, networking parts and its VMware software. AI revenue jumped 63% in the period to $5.2 billion, beating the company's prior prediction of $5.1 billion.
Tan said he expects AI revenue to reach $6.2 billion this quarter.
The company said that its chip sales, reported as semiconductor solutions, rose 57% to $9.17 billion. Revenue in Broadcom's infrastructure software business, which includes VMWare, rose 43% to $6.79 billion.
