Broadcom wanted to get $10 billion from sales of AI chips: investors need more

AI boom in full swing Broadcom expects to generate $10 billion from sales of AI chips in 2024. However, the company's share price fell after it failed to raise its full-year revenue forecast of $50 billion. Investors need more. DiscussBroadcom wanted to get $10 billion from sales of AI chips: investors need more© Ferra

This mixed result reflects how strong the position Broadcom in the AI ​​hardware race and investor concerns about future growth. In the first quarter, the company's AI revenues quadrupled compared to the previous year. CEO Hock Tan revealed a particularly lucrative segment within this growth: developing custom AI chips for large clients. Broadcom expects $7 billion to come from just two of these partnerships.

Investors, however, were expecting a bolder statement about future growth. Broadcom's $50 billion revenue forecast, while projecting 40 percent growth, fell short of expectations driven by the stock's recent rally on AI optimism. This cautious outlook, coupled with Broadcom facing competition from Nvidia in the custom chip market, led to a slight drop in the share price in after-hours trading.