Broadcom shares close up 12% on earnings beat, increased demand for AI products

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Broadcom shares surged Thursday after the company beat earnings and revenue estimates for the second quarter.

shares closed up 12% on Thursday after the company posted second fiscal quarter earnings that beat analysts' estimates and showed that it's benefiting from the artificial intelligence boom.of $10.96 ahead of LSEG consensus estimates of $10.84 per share. The company reported revenue of $12.49 billion, beating the expected $12.03 billion.

The chipmaker said it expects about $51 billion in sales during its fiscal 2024 year, an increase from the company's previous forecast and slightly higher than consensus expectations of $50.42 billion., we view Broadcom as a critical piece to the ongoing AI infrastructure build-out, and reiterate our Buy rating on the stock with 8% potential upside to our updated 12-month price target of $1,850 ," Goldman Sachs analysts said in a note to investors on Thursday.

Bank of America analysts reiterated a buy rating and said they consider Broadcom a top AI pick because it is positioned to grow in custom AI chips and Ethernet networking. They also said Broadcom can upsell VMware to enterprise customers deploying AI. "We model FY24E sales at $51.5bn, above guidance on continued upside to AI, with FY25/FY26E sales growth raised to 16%/10% YoY from 14%/8% prior," the Bank of America analysts said.on Wednesday. Shares are set to begin trading on a split-adjusted basis on July 15.

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