Broadcom Hits $1 Trillion Valuation, Forecasts Massive AI Chip Market Growth

Dec 12, 2024, 11:36 PM

Broadcom Inc. ($AVGO) has reported its Q4 FY24 earnings, showcasing a significant surge in its stock price following the announcement. The company's shares soared nearly 19% in pre-market trading, propelling its market capitalization past the $1 trillion mark for the first time. This surge was driven by Broadcom's optimistic forecast for its artificial intelligence (AI) chip market, predicting a revenue opportunity ranging from $60 billion to $90 billion by fiscal year 2027. The company reported a 51% year-over-year increase in revenue to $14.05 billion, slightly missing the $14.09 billion estimate, but its adjusted earnings per share of $1.42 beat expectations of $1.38. AI revenue for the fiscal year grew by 220% to $12.2 billion, highlighting the company's strong position in the AI sector. Broadcom also raised its quarterly dividend by 11% to $0.59 per share, signaling confidence in its future growth prospects. CEO Hock Tan mentioned that the company is working with three hyperscalers, helping them design AI chips, which could lead to lucrative deals.