Broadcom Thursday forecast second-quarter revenue above Wall Street expectations on strong demand for its custom artificial intelligence chips from companies looking to process big data, sending its shares up more than 7% in extended trading.
The chipmaker expects revenue of around $14.90 billion, compared with estimates of $14.76 billion, according to data compiled by LSEG.
Broadcom is seeing red hot demand for its custom artificial intelligence chips from companies looking for an alternative to the costly processors of market leader Nvidia as they rapidly expand their AI infrastructure.
Big tech has been spending heavily on Broadcom's hardware to process vast quantities of data used in training large language models as they bank on the booming technology to drive sharp growth.
Smaller rival Marvell Technology also reported strong growth for its AI segment on Wednesday, but did not meet investors' lofty expectations, sending its shares sharply down.
Broadcom reported revenue of $14.92 billion for the first quarter, beating estimates of $14.61 billion.