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

The chipmaker 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 the company is positioned to grow in custom AI chips, Ethernet networking and 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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