Broadcom Stock (AVGO) Gains 5% after Strong Q1 Results — What Comes Next?

Broadcom AVGO +1.18% ▲ gained about 5% in after-hours trading Wednesday as the chipmaker reported strong quarterly results and highlighted rising demand for artificial-intelligence chips. The company also announced a new $10 billion stock buyback, adding to the positive sentiment around the stock.

Claim 50% Off TipRanks Premium

• Unlock hedge fund-level data and powerful investing tools for smarter, sharper decisions

• Stay ahead of the market with the latest news and analysis and maximize your portfolio’s potential

For context, Broadcom reported adjusted earnings of $2.05 per share, beating Wall Street estimates of $2.03. Revenue came in at $19.31 billion, ahead of expectations of about $19.18 billion and up 29% from a year earlier. Looking ahead, the company expects revenue of about $22 billion in the current quarter, well above the roughly $20.5 billion analysts had forecast.

AI Demand Continues to Drive Growth

Artificial intelligence was the biggest highlight of the quarter. CEO Hock Tan said AI-related revenue more than doubled to $8.4 billion, driven by strong demand for custom AI accelerators and networking chips.

Tan noted that demand is expanding beyond traditional hyperscale customers. Companies are increasingly building AI agents, code-generation tools, and consumer AI platforms, which is driving more demand for Broadcom’s chips and networking equipment.

Broadcom’s custom AI chip work includes projects with major tech companies such as Alphabet GOOGL -0.15% ▼ , Meta Platforms META +1.93% ▲ , and AI firms like OpenAI and Anthropic.

What to Watch Next for AVGO Stock

Looking ahead, investors are watching whether Broadcom can keep expanding its position in the fast-growing AI chip market.

Tan said the company expects AI semiconductor revenue of about $10.7 billion in the current quarter, suggesting that demand remains strong. He also told analysts that Broadcom has “line of sight” to AI chip sales exceeding $100 billion annually by 2027, a milestone that would mark a huge expansion of its AI business.

For investors, the key question now is whether Broadcom can sustain this momentum as more companies deploy AI products and services.

Is AVGO Stock a Buy?

Broadcom’s stock has a consensus Strong Buy rating among 30 Wall Street analysts. That rating is based on 28 Buy and two Hold recommendations issued in the last three months. The average AVGO price target of $449.46 implies 41.55% upside from current levels. These ratings might change after the company’s financial results.

Disclaimer & DisclosureReport an Issue