Broadcom Earnings Boost Chip Stocks
Chip stocks rallied in morning trading on Friday as Broadcom's solid forecast eased demand worries for AI chips. Its forecast eased concerns about the thirst for AI chips, a day after Marvell Technology's spooked the market with a tepid forecast.
Wolfspeed rose 8%; Broadcom rose 6%; Micron and Arm rose 4%; Nvidia, Super Micro Computer, and ASML rose 2%; TSMC and Intel rose 1%.
Broadcom 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 cloud computing companies looking for an alternative to the costly processors designed by Nvidia as they expand their AI infrastructure.
Broadcom CEO Hock Tan said the company expects revenue of $4.4 billion in the second quarter for its AI semiconductors as hyperscale customers invest in custom AI chips for data centers.
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