Shares of chipmaker Broadcom (AVGO) soared over 17% premarket Friday after the company touted its “massive” AI opportunity in its earnings report the prior evening.
Broadcom reported earnings Thursday after the bell. Its quarterly earnings per share of $1.15 were slightly above the $1.12 forecast, and its revenue of $14.1 billion was in line with expectations.
Bernstein analyst Stacy Rasgon wrote in a note early Friday that the results were “decent,” with Broadcom’s strength coming from “stronger AI revenue.”
What appeared to jolt investors, however, was CEO Hock Tan’s comments about its lofty forecast.
“We see our opportunity over the next three years in AI as massive,” Tan said in a call with investors Thursday evening.
Rasgon wrote: “They [Broadcom management] went out of their way to give investors a reason to dream, painting a 3 year (2027) picture with potential $60B-$90B AI revenue opportunity from current customers (likely pointing to material upside vs current AI expectations for the company), and with more possible given two new potential customers currently engaged, if not yet ramping.”
Citi analyst Christopher Danely wrote Friday that the two new customers are likely OpenAI and Apple (AAPL). Rumors of those partnerships were previously reported in Bloomberg and The Information.
