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Broadcom (AVGO) Stock Surges 5% on Bold $100B AI Revenue Projection by 2027

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Key Takeaways

  • AI-related revenue at Broadcom more than doubled during Q1, reaching $8.4 billion thanks to strong sales of custom AI accelerators and networking solutions.
  • CEO Hock Tan forecasted that AI chip revenue will surpass $100 billion annually by 2027.
  • First quarter adjusted earnings per share reached $2.05, surpassing analyst expectations of $2.03; total revenue of $19.31 billion exceeded projections.
  • Management issued Q2 revenue guidance of approximately $22 billion, significantly higher than the Street’s ~$20.5 billion estimate.
  • A fresh $10 billion share repurchase program was unveiled, with supply commitments locked through 2028.

Shares of Broadcom advanced approximately 5% during Thursday’s session following robust first-quarter financial results and an optimistic long-term AI growth outlook presented by CEO Hock Tan.


AVGO Stock Card
Broadcom Inc., AVGO

The rally followed Broadcom’s report of adjusted earnings reaching $2.05 per share, narrowly beating the Wall Street consensus of $2.03. Total revenue reached $19.31 billion, marking a 29% increase from the prior year and exceeding analyst expectations of $19.18 billion.

The second-quarter outlook proved particularly impressive. Management projected revenue near $22 billion for the upcoming quarter — substantially above the analyst consensus of $20.5 billion.

Artificial intelligence revenue emerged as the standout metric. The segment more than doubled during the period to reach $8.4 billion, propelled by robust demand for customized AI accelerators and networking hardware.

According to Tan, the customer base has expanded beyond established hyperscale cloud providers. Organizations developing AI agents, automated code generation platforms, and consumer-facing AI applications are increasingly adopting Broadcom’s specialized chip solutions.

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The company’s AI semiconductor partnerships include major technology giants such as Alphabet, Meta, OpenAI, and Anthropic.

During the analyst call, Tan expressed confidence that the company has clear “line of sight” to annual AI chip revenue surpassing $100 billion by 2027 — a projection that exceeded even the most bullish Street forecasts.

JPMorgan analysts project the company could generate between $12 billion and $15 billion for each gigawatt of AI infrastructure capacity by 2027. Their revised AI revenue projections “conservatively” reach $120 billion or higher.

Analysts at Goldman Sachs highlighted that Broadcom’s “leadership in AI networking and custom silicon enables the lowest inference cost for its hyperscaler customers.”

Supply Agreements and Profitability

Investor concerns about high-bandwidth memory constraints were prominent heading into earnings. Tan directly addressed these worries, confirming that Broadcom has locked in memory supply and advanced semiconductor wafer capacity extending through 2028.

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He also dismissed profitability concerns related to increased AI chip rack shipments. According to Tan, the company has optimized production yields and costs to the point where AI business margins are “fairly consistent” with its broader semiconductor portfolio.

The company is approaching 10 gigawatts of deployed capacity distributed across six major customers — a diversification metric that helped alleviate investor worries about customer concentration.

Capital Returns and Street Sentiment

Complementing the earnings report, Broadcom unveiled a new $10 billion stock repurchase authorization, signaling management confidence in the business trajectory.

Wall Street currently rates the stock as a consensus Strong Buy based on input from 30 analysts — comprising 28 Buy ratings and 2 Hold ratings — with a mean price target of $449.46.

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Broadcom’s impressive performance created positive ripple effects across related semiconductor names. Credo Technology shares surged 10% while Amphenol climbed 4%, reflecting investor enthusiasm for copper-based connectivity solutions over optical alternatives in AI server architectures.

Tan indicated that AI chip revenue for the current quarter should reach $10.7 billion, signaling continued growth momentum.

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Crypto World

Stablecoins Do Not Threaten Banking Just Yet: Analyst

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Stablecoins Do Not Threaten Banking Just Yet: Analyst

The impact of stablecoins on the banking sector appears “limited” at the current phase of the adoption cycle, but banks could face increasing competition and an erosion of market share as the stablecoin sector and tokenized real-world assets (RWAs) grow in market capitalization. 

“So far, the use of stablecoins remains limited, but their market capitalization exceeded $300 billion at the end of last year,” Abhi Srivastava, associate vice president of Moody’s Investors Service Digital Economy Group, told Cointelegraph.

The stablecoin market cap has surged past $300 billion. Source: RWA.xyz

The role of stablecoins in payments, cross-border commerce and onchain finance is “expanding,” despite their currently limited role, Srivastava said, adding that existing payment systems in the US are already “fast, low-cost and trusted.” He said:

“For the banking sector, at this stage, disruption risk appears limited. In the near term, US rules that prohibit stablecoins from paying yield mean they are unlikely to replace traditional deposits at scale domestically.”

However, over time, growing adoption of stablecoins and tokenized RWAs, traditional or physical financial assets represented on a blockchain by a token, could place “pressure” on the banking sector, leading to deposit outflows and reduced lending capacity, he said.

Stablecoin regulatory policy has become a hot-button issue among crypto industry executives and those in the banking sector, with fears that yield-bearing stablecoins could erode banking market share proving to be a stumbling block for the CLARITY crypto market structure bill in Congress. 

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Related: Stablecoins behave like FX markets as liquidity splits: Eco CEO

CLARITY Act stalled, as banks fight yield-bearing stablecoins

The Digital Asset Market Clarity Act of 2025, also known as the CLARITY Act, is a comprehensive crypto market regulatory framework that establishes an asset taxonomy, regulatory jurisdiction and oversight over the crypto markets.

The CLARITY crypto market structure bill. Source: US Congress

It is now stalled in Congress after a group of crypto industry companies, led by cryptocurrency exchange Coinbase, publicly stated opposition to earlier drafts of the bill.

A lack of legal protections for open-source software developers and a prohibition on yield-bearing stablecoins were among some of the most contentious issues cited by crypto industry opponents of the legislation.

Several attempts have been made by US lawmakers and the White House to negotiate a bill acceptable to both the crypto industry and the bank lobby.

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Earlier this month, North Carolina Senator Thom Tillis said he plans to release an updated draft bill proposal that would be acceptable to both sides; however, the bill has reportedly received pushback, according to Politico, and has yet to be publicly released. 

However, other crypto industry executives and market analysts have warned that if the CLARITY Act fails to pass, it could open the crypto industry up to future regulatory crackdowns by hostile lawmakers and officials.

Magazine: Stablecoins will see explosive growth in 2025 as world embraces asset class