Broadcom’s Record Growth
Broadcom (AVGO) delivered good fourth-quarter 2024 earnings results, surpassing market expectations and highlighting the accelerating growth of its AI business. CEO, Hock Tan, revealed that the company's artificial intelligence (AI) revenue more than tripled during the year, supported by strong demand for custom AI chips developed in collaboration with major cloud providers. These developments have positioned the company as a key player in the rapidly expanding AI infrastructure market.
Key Financial Metrics:
● Earnings Per Share (EPS): $1.42 vs the expected $1.38.
● Revenue: $14.05 billion, slightly below the $14.09 billion consensus estimate.
● Revenue Growth Year-over-Year: 51%, from $9.3 billion to $14.05 billion.
● Net Income: $4.32 billion, up 23% from $3.52 billion (83 cents per share) in the prior year.
● AI Revenue Growth: 220%, reaching $12.2 billion for the year.
● Infrastructure Software Revenue: $5.82 billion, nearly tripling year-over-year, boosted by the VMware acquisition.
● Dividend Increase: 11% for FY2025, to 59 cents per share.
Broadcom's ongoing investment in AI technology, particularly in its XPUs and AI networking components, reflects strong momentum in tapping into future opportunities, with potential market value estimated at up to $90 billion by 2027. Analysts have a positive outlook on the company, assigning it an average “Buy” rating and an average price target of $217.20, according to data from FactSet. Following its latest earnings report, Broadcom's stock surged over 25%, closing at $224.80 for the week. The stock is trading at approximately $240, signalling continued investor confidence in the company's AI-driven growth.
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** This article was prepared by BROKSTOCK analyst Maboko Seabi
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