Broadcom, a chipmaker based in Palo Alto, California, has increased its revenue forecast for AI-linked chips by 10%, announcing a stock split to capitalize on the surge in its shares. The company expects to bring in $11 billion in revenue from AI chips in 2024, a significant jump from its previous estimate of $10 billion. This boost in revenue comes as businesses heavily invest in AI applications such as OpenAI’s ChatGPT, driving demand for Broadcom’s advanced networking chips.
In the second quarter, Broadcom generated $3.1 billion in revenue from AI products, reflecting the growing demand for its offerings in the AI market. The company has also secured orders from major cloud providers looking to decrease their reliance on Nvidia’s expensive processors, positioning Broadcom as a key player in the custom chip manufacturing space. The forward stock split, scheduled to take place on July 15, aims to make Broadcom’s shares more accessible to retail investors and build on the company’s strong performance, with revenue from its semiconductor solutions segment rising approximately 6% to $7.20 billion in the quarter.
Analysts anticipate significant upside for Broadcom as the data center market transitions to AI servers, with the company expected to benefit greatly from this shift. With its revenue forecast for the year raised to $51 billion, Broadcom is in a strong position for continued growth and success in the AI sector. The company’s infrastructure software segment saw revenue more than double, partially attributed to its acquisition of VMware, further solidifying Broadcom’s position as a leading player in the chip manufacturing industry.
