Semiconductor manufacturer Broadcom released its financial report on Thursday, with its performance exceeding Wall Street's expectations, driving its stock price to soar after hours. In addition, Hock Tan, CEO of Broadcom, has made a very optimistic forecast for revenue in the second quarter of this year, easing market concerns about the demand for artificial intelligence chips.
According to the financial report, Broadcom's first quarter revenue was $14.92 billion, exceeding market expectations of $14.61 billion. Thanks to the strong application of its customized accelerator, the revenue of artificial intelligence chips soared by more than 77%, reaching $4.1 billion; The revenue growth of its infrastructure software division exceeded 47% to $6.7 billion, while analysts expected it to be $6.49 billion.
Broadcom expects its second quarter revenue to be approximately $14.9 billion, while according to data compiled by LSEG, analysts expect it to be $14.76 billion.
Broadcom closed down 6.33% on Thursday, but subsequently released impressive results and an optimistic outlook, with its stock price soaring 12.82% after hours to $202.45, having previously risen more than 16%. Benefiting from strong demand for AI customized chips (ASICs), Broadcom estimates an adjusted EBITDA profit of 66% for the full year. Broadcom has delivered impressive results, easing concerns about the weakening demand for AI chips in the market following the release of Marvel Technology's financial report.
In order not to be confused by short-term market fluctuations, it is recommended that investors carefully evaluate their risk tolerance when considering investing in Broadcom, and combine their investment strategies to decide whether to engage in short-term trading or long-term holding. If you are optimistic about the long-term prospects of Broadcom, it would be a good choice to allocate the stock in a timely manner; But if you lean towards short-term operations, you need to maintain a keen tracking of market trends and develop reasonable stop loss strategies to ensure risk control in market fluctuations.
In short, the significant increase in the stock price of Broadcom's US stock is not only a reflection of the company's own performance, but also a high recognition of the market's potential for future growth in technology stocks. While seizing opportunities, investors need to remember the importance of risk management and invest rationally.
From the market demand for AI chips, large overseas technology manufacturers are still increasing their capital expenditures. Market analysis firm TechInsights released a report in February stating that top ultra large scale cloud service providers will invest approximately $320 billion in AI by 2025, with Amazon investing $97 billion, Microsoft, Google, and Meta investing $85 billion, $75 billion, and $65 billion respectively. Despite skepticism, tech giants will not reduce their investments.
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