Broadcom (AVGO) shares experienced a significant surge of over 8% in premarket trading on Friday. This positive movement followed the chipmaker’s release of its quarterly results and future outlook, which surpassed analysts’ expectations, fueled by strong demand for its artificial intelligence (AI) semiconductors.
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Broadcom reported adjusted earnings per share (EPS) of $1.60 on revenue that grew 25% year-over-year to $14.92 billion. Both figures exceeded expectations, according to Visible Alpha. The company’s projected revenue for the current quarter, estimated at $14.9 billion, also slightly surpassed consensus estimates.
Notably, Broadcom stated that its revenue from AI chip sales surged by 77% during the quarter, with projections indicating continued growth in this area. Citigroup maintained its buy rating on the stock, citing the “upside from AI” and setting a price target of $220. The firm indicated that Broadcom’s strength in the AI sector would likely offset any potential “downside” risks stemming from sanctions on TikTok’s parent company, ByteDance, and any potential loss of business related to supplying radio-frequency (RF) chips to Apple (AAPL).
According to Citi, both ByteDance, which is based in China, and the RF chip business for Apple combined are projected to represent around 2% of Broadcom’s fiscal 2025 sales. The Hill reported that U.S. President Donald Trump has an April 5 deadline for TikTok to be sold or banned, although he indicated that it could potentially be extended if a deal is not finalized.
Over the past 12 months through Thursday, Broadcom shares have risen approximately 33%. However, the stock faced some challenges at the beginning of the year amid increasing concerns about the significant AI spending by tech giants and uncertainties surrounding the potential impact of the Trump administration’s policies related to tariffs and export restrictions on AI chips.
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