Broadcom CEO Hock Tan on Thursday reassured investors about demand for artificial intelligence (AI) chips and presented a strong forecast for the second quarter. The company also hinted at the possibility of winning new customers, which could further strengthen its position in a highly competitive market.
Strong forecast and growth in demand for AI chips
Broadcom's $AVGOforecast eased fears of cooling demand for AI chips raised by Marvell Technology's weak outlook the day before. Broadcom shares, which fell 6% on Thursday, subsequently rose 14% in extended trading after the results were released.
Broadcom expects second-quarter revenue of about $14.90 billion, beating analysts' estimates of $14.76 billion. The company is benefiting from growing demand for its own AI chips from cloud giants looking for an alternative to expensive processors from Nvidia to expand their AI infrastructure.
Broadcom's AI semiconductor revenue is expected to reach $4.4 billion in the second quarter, according…