Semiconductor company Broadcom announced Wednesday that its second-quarter revenue projections surpass Wall Street expectations, driven by robust demand for specialized chips that power artificial intelligence systems in data centers.
Major technology companies including Alphabet, Microsoft, Amazon and Meta are projected to invest a minimum of $630 billion this year in building AI infrastructure, creating increased demand for semiconductors, servers, storage systems and networking equipment from manufacturers like Broadcom.
“Our AI revenue growth is accelerating, and we expect AI semiconductor revenue to be $10.7 billion in Q2,” CEO Hock Tan said in a statement.
The semiconductor firm anticipates quarterly revenue of approximately $22.0 billion, surpassing the average analyst projection of $20.56 billion according to LSEG data.
The company also revealed plans for a new stock buyback program valued at up to $10 billion.
Last month, Broadcom indicated it anticipates selling a minimum of 1 million chips by 2027 using its innovative stacked design technology, establishing a new product line and sales objective that could generate billions in revenue.
The firm’s chip stacking technology allows clients to create semiconductors with enhanced performance while consuming less power to satisfy the expanding computational demands of AI applications.
Revenue growth in the infrastructure software division decelerated to approximately 1% at $6.80 billion during the first quarter, falling short of analyst predictions of 2.6% growth reaching $6.88 billion.
Broadcom stock remained relatively unchanged during volatile after-hours trading. The shares have declined roughly 8% year-to-date, following a 49% increase in 2025.
AI chip leader Nvidia reported stronger-than-anticipated January quarter results last month and projected current-quarter revenue above market forecasts. However, this failed to prevent a stock selloff as investors remained concerned about potential overinvestment in AI technology.
Market participants also express concern that Nvidia continues directing capital toward expanding AI infrastructure rather than increasing returns to shareholders, with uncertain long-term benefits.
