Broadcom shares rose 24%, the company’s capitalization exceeded $1 trillion for the first time

The long-established list of companies with capitalizations of more than $1 trillion added a newcomer yesterday in the form of Broadcom, whose stock price jumped 24% yesterday after the publication of quarterly earnings and despite rumors about Apple’s intentions to stop using its components in its products.

Image source: Broadcom

In fact, as CNBC notes, last Friday marked Broadcom’s best stock market day in the company’s history, with the stock price up more than 24% in yesterday’s session. The quarter’s results exceeded analysts’ expectations, demonstrating a strong increase in revenue in the segment of components for artificial intelligence systems. The company’s total revenue increased by 51% year-on-year to $14.05 billion and even fell slightly short of the projected value, but in general, in the AI ​​business, the company’s revenue at the end of the fiscal year grew by 220% to $12.2 billion, according to management. Quarterly revenue in the semiconductor solutions segment increased by only 12% year-over-year to $8.23 billion.

Positive dynamics for Broadcom shares was added by the statement of the head of the company, Hock Tan, about the development of a chip for AI systems customized by large cloud clients. The company’s net profit in the fourth segment increased by 23% to $4.32 billion. Analysts recommended Broadcom shares to buy, explaining this recommendation by the company’s ability to increase its revenue in the field of components for AI systems. However, competition from Nvidia poses a certain threat to Broadcom’s business expansion in this area. The potential of the latter in the AI ​​segment, according to representatives of Morgan Stanley, will most actively develop in the next two or three years.