(Bloomberg) — Broadcom Inc. (AVGO) shares jumped after the chip supplier for Apple Inc. (AAPL) and other big tech companies gave an upbeat forecast, reassuring investors that spending on artificial intelligence computing remains healthy.
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Sales will be about $14.9 billion in the three-month period ending May 4, Broadcom said in a statement Thursday. Analysts had estimated $14.6 billion on average, with some projections surpassing $15.1 billion.
The report suggests that a historic boom in AI spending is still going strong. Broadcom has been a major beneficiary of those expenditures, with its data center customers pouring money into new infrastructure.
The AI frenzy had helped push up the company’s market value above $1 trillion last year. But investors have grown more cautious in 2025, and they’ve been looking for evidence that the AI surge has legs.
On that front, Broadcom’s results delivered. Chief Executive Officer Hock Tan cited AI spending as a key driver during the first quarter, which ended Feb. 2. Sales from that area will total $4.4 billion in the current period, he said.
Broadcom’s stock rose as much as 6.7% after markets opened in New York on Friday, its biggest intraday gain in about a month. The shares closed at $179.45 on Thursday, down 23% so far this year.
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The results follow a poorly received earnings report Wednesday from Broadcom competitor Marvell Technology Inc (MRVL). That company’s revenue increased 27% in the most recent quarter, and it projected an acceleration in the current period. But the growth wasn’t enough for investors, who sent the shares down 20% on Thursday.
Broadcom’s profit was $1.60 a share in the fiscal first quarter, excluding some items, with revenue rising 25% to $14.92 billion. Analysts had estimated $1.50 a share in earnings and sales of $14.6 billion, according to data compiled by Bloomberg.
Though Broadcom makes a variety of chips — including connectivity components for the iPhone and networking technology — investors have focused lately on its custom design business. That division helps data center clients create chips that can create and run artificial intelligence software and services. The company is also now a major provider of software used by corporations to run their businesses and networks.
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During a conference call with analysts, Tan said Broadcom was ramping up production of AI chips for hyperscalers — a term that describes giant data center operators. He said the company’s custom semiconductors can be more effective in some cases than general-purpose accelerator chips, the kind of product sold by Nvidia Corp. (NVDA).
The company also is adding new hyperscaler customers, Tan said. It has three existing clients in this category and has four more on the horizon, with two of those close to becoming revenue-generating customers.
“Our hyperscale partners continue to invest aggressively,” he said.
The additional work isn’t captured in the company’s current market revenue forecast for this area, which runs from $60 billion to $90 billion in 2027. That suggests Broadcom’s opportunity is growing beyond that range.
Broadcom doesn’t identify its customers by name, but analysts have said that the three existing hyperscaler clients are Alphabet Inc.’s (GOOG, GOOGL) Google, Meta Platforms Inc. (META) and TikTok owner ByteDance Ltd. Tan said that forthcoming US rules that seek to further limit the export of AI-related chips won’t affect any of those customers.
Tan has built one of the most valuable companies in the chip industry through a string of acquisitions. He also has assembled a software unit that’s now approaching the scale of Broadcom’s semiconductor operations. That reach makes the company’s forecasts a bellwether for demand over a broad swath of the technology industry.
Tan was asked during the conference call about reports that Broadcom is considering a bid for part of Intel Corp. and other acquisitions in general.
The CEO said he was focusing instead on AI and the integration of VMware Inc., which Broadcom bought for roughly $69 billion in 2023.
“I’m too busy,” he said. “We’re not thinking of it at this point.”
Broadcom’s semiconductor division had revenue of $8.21 billion in the February quarter, up 11%. Software sales were $6.7 billion. Both numbers topped projections.
Broadcom, based in Palo Alto, California, sells components for cars, smartphones and internet access gear. Its push into software, meanwhile, includes products for mainframe computers, cybersecurity and data center optimization.
Apple is a top customer. During earnings calls, Tan typically gives updates on Broadcom’s often-contentious relationship with that company, which he refers to as his “large North American customer” or another vague term.
Bloomberg News reported earlier that Apple would start switching away from a key Broadcom wireless chip starting next year. The iPhone maker has been replacing suppliers’ components with in-house versions, a trend that’s also set to hit chipmaker Qualcomm Inc (QCOM).
