Broadcom Inc. (AVGO) stock soared 5.78% in the after-hours trading session on Thursday, following the company's better-than-expected fourth-quarter earnings report and positive news related to its artificial intelligence (AI) chip business.
The chipmaker reported quarterly earnings of $1.42 per share, beating analyst estimates of $1.38 by 2.9%. However, revenue of $14.054 billion slightly missed expectations of $14.091 billion, although it marked a 51.2% year-over-year increase.
More significantly, Broadcom provided an upbeat revenue forecast for the first quarter of 2025, projecting revenue of about $14.6 billion, surpassing analyst expectations of $14.55 billion. This guidance reflects Broadcom's confidence in growing demand for its chips, particularly in the AI and data center segments.
Contributing to the stock's after-hours rally was a report that Broadcom is collaborating with Apple Inc. (AAPL) to develop custom AI accelerator chips. According to sources cited by Bloomberg, Apple is working with Broadcom on its first server chip tailored for artificial intelligence, codenamed "Proxima." This partnership could significantly boost Broadcom's AI chip business and strengthen its position in the rapidly growing AI market.
However, the news was not entirely positive for Broadcom. Bloomberg also reported that Apple plans to switch to an in-house chip for Bluetooth and Wi-Fi connections in its iPhones starting in 2025. This move would replace some components currently provided by Broadcom, potentially impacting the company's revenue from Apple in the future.
