Broadcom forecasts Q1 revenue above estimates on strong AI chip demand

Published On Dec 13, 2024, 4:13 AM

Broadcom has forecasted first-quarter revenues of approximately $14.6 billion, slightly above Wall Street's expectations of $14.57 billion. The company's optimistic outlook is driven by increased demand for its custom AI chips, particularly from large tech firms seeking alternatives to Nvidia's AI processors. The CEO estimates a potential revenue opportunity from AI ranging between $60 billion and $90 billion by fiscal 2027, with several large customers set to deploy millions of AI chip clusters. However, Broadcom faces competition from Nvidia and potential revenue loss as Apple moves towards designing more of its own chips.

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Broadcom's strong demand for AI chips positions it well in the semiconductor market, benefiting from the ongoing AI revolution. The company's revenue growth in this segment could significantly increase its long-term value, notwithstanding the competition from Nvidia and potential losses from Apple.

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