Broadcom reports record revenue and surge in AI-related revenue

From Nasdaq: 2024-12-16 02:55:00

Broadcom beat earnings estimates, reporting a record revenue of $51.6 billion with a 220% surge in AI-related revenue to $12.2 billion. Adjusted EBITDA rose 37% to $31.9 billion, prompting an 11% dividend increase. The stock soared 95% this year, reaching all-time highs after the report. AI infrastructure investments continue to drive growth.

The rise of AI has increased demand for custom-designed chips, leading to a surge in custom silicon companies like Broadcom and Marvell. Custom AI chips, known as ASICs, are tailored for specific AI workloads, offering efficiency and cost-effectiveness. Broadcom’s recent deal with Apple to develop custom AI solutions for servers highlights the growing industry trend.

Broadcom’s stock broke out to all-time highs following a 22% gain post-earnings report. The company’s long-term outlook remains strong, with projected earnings growth of 16.5% annually. The surge in AI infrastructure investments and custom chip solutions solidifies Broadcom’s role as a key player in the semiconductor landscape.

Investors may find Broadcom an attractive stock given its strong performance and outlook in the AI sector. However, with the stock trading at all-time highs, buyers may consider waiting for a pullback. Long-term investors confident in Broadcom’s position in custom AI chips and infrastructure may find opportunities to accumulate shares over time.

Zacks Investment Research highlights Broadcom, Marvell, Amazon, and Apple as top stocks to watch. These companies have shown strong performance and growth potential in the AI and technology sectors. Zacks’ top stock-picking strategies have consistently outperformed the market, offering investors valuable insights into potential opportunities for early price pops.



Read more at Nasdaq: Zacks Investment Ideas feature highlights: Broadcom, Marvell, Amazon and Apple