Broadcom Inc (NASDAQ:AVGO), a global technology leader that designs, develops and supplies semiconductor and infrastructure software solutions, stock rose 3.23% (As on March 7, 11:16:44 AM UTC-4, Source: Google Finance) after the company’s upbeat forecast assured investors that spending on artificial intelligence computing remains healthy. Broadcom’s semiconductor division had revenue of $8.21 billion in the quarter, up 11%. Software sales were $6.7 billion. Both numbers topped projections. Q1 AI revenue grew 77% year-over-year to $4.1 billion and infrastructure software revenue grew 47% year-over-year to $6.7 billion. Free cash flow was $6.0 billion, up 28% year-over-year. The Company’s cash and cash equivalents at the end of the fiscal quarter were $9,307 million, compared to $9,348 million at the end of the prior fiscal quarter. During the first fiscal quarter, the Company generated $6,113 million in cash from operations and spent $100 million on capital expenditures. The Company paid $2,036 million of withholding taxes related to net settled equity awards that vested in the quarter (resulting in the elimination of 8.7 million shares). Broadcom’s net income rose to $5.5 billion, up from just $1.33 billion in the year-ago quarter.
AVGO in the first quarter of FY25 has reported the adjusted earnings per share of $1.60, beating the analysts’ estimates for the adjusted earnings per share of $1.50. The company had reported the adjusted revenue growth of 25 percent to $14.92 billion in the first quarter of FY25, beating the analysts’ estimates for revenue of $14.6 billion, according to data compiled by Bloomberg. The company’s record first-quarter revenue is primarily thanks to its hyperscale partners, which “continue to invest in AI accelerators and connectivity solutions for AI data centers.”
Sales will be about $14.9 billion in the three-month period ending May 4, while the analysts had estimated $14.6 billion on average, though some projections surpassed $15.1 billion. The company expects continued strength in AI semiconductor revenue of $4.4 billion in Q2, as hyperscale partners continue to invest in AI XPUs and connectivity solutions for AI data centers. Second quarter Adjusted EBITDA guidance is of approximately 66 percent of projected revenue.
Meanwhile, the company has been running manufacturing tests with Intel Corp.’s 18A manufacturing process to see if its chip fabs might be suitable for its needs. It’s said that the company is mulling whether or not to place orders worth hundreds of millions of dollars with Intel’s chip fab business. Any contracts would be a massive win for struggling Intel, whose contract manufacturing business has struggled to win over any prominent chop designer customers so far.