Broadcom Q1 AI revenue grows 2x, shares zoom: 5 takeaways from tech giant's earnings

American tech major Broadcom caught investors' eye after the market's eighth largest company by weight beat analyst estimates with a 29 per cent year-on-year jump in quarterly revenue on the back of strong demand for AI chips. Broadcom's results come roughly a week after chip designer NVIDIA staged a strong financial performance for the January quarter.

Palo Alto-based Broadcom is widely expected to be one of the beneficiaries of the ongoing AI boom.

Here are 10 things to know about Broadcom's Q1 results:

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• The company's adjusted earnings per share (EPS) stood at $2.05. EPS is a key measure of profitability that determines the slice of profit allocated to each outstanding share.
• Its net income increased to $7.35 billion in Q1 from $5.50 billion in the corresponding period a year ago.
• The tech giant's Q1 (the quarter ended February 1) revenue came in at a better-than-expected $19.31 billion, according to foreign media reports, with AI sales rising 106 per cent to $8.4 billion.

Our visibility in 2027 has dramatically improved: Broadcom CEO Hock Tan

• Broadcom CEO Hock Tan said the company has visibility for more than $100 billion in AI chip revenue by 2027, highlighting strong demand from major tech companies. Last month, the firm had said that it expected to sell at least 1 million chips by 2027.
• "We have also secured the supply chain required to achieve this," said the CEO, referring to the AI chip revenue goal. He also said: “Our infrastructure software is not disrupted by AI." The Growth in the company's infrastructure software segment came in at ⁠1.0 per cent to $6.80 billion.
• The company guided for a revenue of $22 billion in the next quarter, including $14.8 billion in semiconductor solutions revenue. Its current quarter -- Q2 -- ends on May 1.
• It also expects an adjusted profit margin of 68 per cent, reportedly beating market estimates. Its quarterly semiconductor solutions revenue stood at $12.52 billion.
• Reports suggested that its Q2 revenue guidance and Q1 semiconductor solutions sales exceeded market expectations.
• The California-headquartered company declared a share buyback programme of up to $10 billion.
• The stock closed 1.2 per cent higher and then surged up to 6.7 per cent in extended market trading. Broadcom shares rose by $3.7 to end at $317.5 apiece on Wall Street, before rising to as high as $335 in post-market trading. US equity benchmark Dow Jones Industrial Average (DJIA) rose 0.5 per cent for the day. At the current levels, Broadcom and NVIDIA shares have risen 65.7 per cent and 56 per cent in a year, sharply outperforming a gain of 13.3 per cent in the Dow.