Broadcom Inc. (AVGO) shares soared in after-hours trading on Thursday following the company's impressive fiscal fourth-quarter results and bullish outlook for its artificial intelligence (AI) business over the next three years.
For the quarter ended November 3, 2024, Broadcom reported adjusted earnings of $1.42 per share, beating analysts' estimates of $1.38. While revenue of $14.05 billion slightly missed expectations of $14.09 billion, it marked a 51.2% year-over-year increase.
The standout performance was Broadcom's AI revenue, which skyrocketed 220% year-over-year to $12.2 billion in fiscal 2024, driven by strong demand for its leading AI accelerators (XPUs) and Ethernet networking portfolio. The company also delivered record annual revenue of $51.6 billion, with its infrastructure software segment contributing $21.5 billion following the successful integration of VMware.
Looking ahead, Broadcom provided an upbeat revenue forecast for the first quarter of fiscal 2025, projecting revenue of approximately $14.6 billion, surpassing analysts' expectations of $14.55 billion. This robust outlook reflects Broadcom's strong positioning in the rapidly growing AI market and its ability to capitalize on the increasing demand for data center infrastructure.
However, the most notable revelation was Broadcom's projection of a massive $60 billion to $90 billion revenue opportunity for its AI accelerators and networking solutions in fiscal 2027 alone. CEO Hock Tan stated that three of Broadcom's hyperscale customers plan to deploy one million XPU clusters across a single fabric by 2027, representing a significant growth opportunity for the company's AI business.
