Broadcom’s stock grew about 13% in premarket trading on Friday, approaching its biggest gain in 12 weeks.
The company is also expecting to earn almost $15 billion in the quarter ending May 4 from its AI chip sales. However, the firm’s shares closed at $179.45 on Thursday, down 23% so far this year.
Broadcom expects $14.9 billion in revenue sales by May 4
Broadcom projects its sales to be at $14.9 billion in the three-month period ending May 4, not far off from the average analyst prediction of $14.6 billion. Some, however, even predicted that the chip supplier would have accrued over $15.1 billion by then.
Most tech companies have invested heavily in AI, and Broadcom is just one of the few companies that have profited from this increased focus. The chip producer saw its market value rise to over $1 trillion last year and even earned $4.4 billion in sales in the first quarter of 2025. Chief Executive Officer Hock Tan even attributed the first quarter’s earnings to increased AI spending among businesses and networks.
However, the firm’s shares are down 23%, closing at only $179.45 on Thursday. The fall came soon after Marvel Technology Inc., one of Broadcom’s biggest rivals, delivered its earnings report on Wednesday. Marvel Technology’s revenue was up by almost 30% in its recently concluded quarter and is also forecasting a rise in the current period. Nevertheless, Marvel’s shares also dropped by 20% on Thursday.
Broadcom’s Tan believes their AI chips perform better than general-purpose chips
Broadcom has been prioritizing its custom design business, assisting data centre clients in developing and managing artificial intelligence software and services
Moreover, the company plans to increase its AI chip production for hyperscalers.
Tan has insisted that the company’s tailored semiconductors can outperform general-purpose accelerator chips, hoping to attract the attention of big data centre operators.
Nevertheless, he claims the firm is on track to add hyperscaler customers. He stated the company has its eyes on four more new partners, with two relatively close to signing a deal. He even claimed that its three existing hyperscale partners have continued to invest “aggressively”.
Broadcom has never really disclosed its hyperscale clients; however, some have speculated that the three existing customers are Alphabet Inc.’s Google, Meta Platforms Inc., and TikTok’s parent company, ByteDance Ltd.
Meanwhile, some have cited concerns over how future regulations could affect the AI market. However, Tan has assured clients that the incoming rules the federal government wants to impose will not affect them.
The company has also been making multiple acquisitions to build its software capacity. Some have even hinted that Broadcom would buy part of Intel Corporation and make more acquisitions.
However, Tan dismissed the speculations about buying a portion of Intel, saying the company is leaning more toward AI and the incorporation of VMware Inc. He added, “I’m too busy. We’re not thinking of it at this point.”
Meanwhile, Nvidia, the leading maker of AI chips, was up 0.7% after tumbling 5.7% on Thursday on the belief that Broadcom’s report could inject some life into the faltering artificial intelligence trade. Nvidia shares have declined 17% this year. Micron Technology gained 3.5% on Friday.
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