Broadcom's Q4 EPS Beats, AI Revenue Up 220%, Dividend Raised; Shares Surge Past $1 Trillion Valuation

Dec 13, 2024, 01:17 PM

Broadcom Inc. reported its fiscal fourth-quarter earnings, with adjusted earnings per share of $1.42, surpassing analyst expectations by $0.04. The company posted revenue of $14.05 billion, a 51% year-over-year increase, slightly below estimates of $14.09 billion. Adjusted EBITDA for the fourth quarter was $9.09 billion, exceeding projections. Broadcom's semiconductor solutions revenue reached $8.23 billion, exceeding forecasts of $8.05 billion, while infrastructure software revenue was $5.8 billion. The company's AI revenue surged 220% year-over-year to $12.2 billion for fiscal year 2024, significantly contributing to the record $30.1 billion in semiconductor revenue. The growth was driven by Broadcom's leading AI accelerators (XPUs) and Ethernet networking portfolio. Broadcom's CFO stated, "Semiconductor revenue was a record $30.1 billion driven by AI revenue of $12.2 billion." The company sees "massive opportunity in AI chips over the next three years" and expects first-quarter AI revenue growth of 65%. Looking ahead, Broadcom forecasts first-quarter revenue of approximately $14.6 billion, aligning with analysts' estimates, and expects an adjusted EBITDA margin of about 66% of projected revenue. The company anticipates continued strong demand for its AI products. Broadcom raised its quarterly dividend by 11% to $0.59 per share. Following the earnings announcement, the company's shares surged more than 20%, pushing Broadcom's market capitalization beyond $1 trillion for the first time. Analysts responded positively, raising price targets and emphasizing Broadcom's significant growth opportunities in the AI sector, with some projecting the AI business could grow at a 40–50% revenue CAGR over the next several years.