Broadcom on Wednesday forecast second-quarter revenue that outpaces Wall Street expectations, signaling strong demand for advanced semiconductors deployed in data centers that power artificial intelligence workloads. The chip designer also announced a new share repurchase program of up to $10 billion to run through the end of the year.
The company said that major technology firms including Alphabet, Microsoft, Amazon and Meta are expected to spend at least $630 billion this year to build AI infrastructure - an investment wave that Broadcom said will support demand for chips, servers, storage and networking equipment.
AI revenue and guidance
Broadcom’s chief executive, Hock Tan, stated that the company’s AI revenue growth is accelerating and set an expectation that AI semiconductor revenue will total $10.7 billion in the second quarter. Overall, Broadcom forecast quarterly revenue of roughly $22.0 billion, above the analysts’ average estimate of $20.56 billion compiled by LSEG.
The firm also reiterated a product and sales goal it outlined last month: selling at least 1 million chips by 2027 based on its stacked design technology. Broadcom characterized that effort as a potential future revenue stream that could be worth billions of dollars.
First-quarter results
For the quarter ended February 1, Broadcom reported revenue of $19.31 billion, a 29% increase from the prior-year period and slightly above analysts’ consensus of $19.18 billion. Adjusted earnings per share came in at $2.05, exceeding the estimate of $2.03.
AI-related revenue more than doubled to $8.4 billion in the quarter, driven by sales of custom AI accelerators and AI networking products. That surge contributed materially to the company’s overall top-line growth.
Software segment and market reaction
The company’s infrastructure software unit showed a marked deceleration in growth, expanding by roughly 1% to $6.80 billion in the first quarter. That pace fell short of analysts’ expectations for 2.6% growth to $6.88 billion.
Following the results and guidance, Broadcom shares rose 3.8% in extended trading. The stock has declined about 8% so far this year after climbing roughly 49% in 2025.
Industry context and investor sentiment
Earlier, AI chip leader Nvidia reported results for the January quarter that beat expectations and offered guidance above market estimates, yet its shares still experienced a selloff amid investor concerns about an AI spending bubble and the level of shareholder returns.
Broadcom emphasized that it typically does not design complete AI chips on its own. Instead, the company collaborates with customers such as Google on tensor processing units and with OpenAI on in-house custom processors. Broadcom engineers assist in translating an early reference design into the physical chip layout that can be manufactured by foundries like TSMC.
Commenting on the company’s positioning, Andrew Rocco, a stock strategist at Zacks Investment Research, said he believes investors will be drawn to Broadcom because, regardless of which software companies prevail in the AI market, they are investing in Broadcom’s networking chips and custom accelerators.
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Takeaway
Broadcom’s guidance for a stronger-than-expected second quarter and its $10 billion buyback announcement underscore the company’s central role supplying chips and networking equipment to firms building AI infrastructure. The performance in the most recent quarter reflects rapid growth in AI-related hardware sales, even as software-related revenue expansion cooled.