Broadcom Boosts Profit Forecast From AI Chips

Broadcom has raised its annual forecast for revenue from chips that support artificial intelligence (AI) by 10% and announced a stock split to capitalize on a rally in its shares this year, Arsheeya Bajwa reported for Reuters.

Broadcom manufactures advanced networking chips that help move vast amounts of data used by AI applications such as OpenAI's ChatGPT. I Image: Broadcom Facebook 

Shares of the Palo Alto, California-based chipmaker surged 12% in extended trading. The company expects $11 billion in revenue from AI-linked chips in 2024, up from its previous forecast of $10 billion.

Broadcom manufactures advanced networking chips that help move vast amounts of data used by AI applications such as OpenAI's ChatGPT, making it one of the beneficiaries of businesses heavily investing in the AI boom.

Broadcom recorded revenue of $3.1 billion from AI products during the second quarter.

The company, which has seen its stock rally more than 30% so far this year, after almost doubling in 2023, will carry out a 10-for-1 forward stock split to make its shares more affordable for retail investors.

The split-adjusted trading is expected to begin on July 15. Revenue from Broadcom's semiconductor solutions segment, which houses its networking and custom chips, rose about 6% to $7.20 billion in the quarter.