Broadcom shares surge 10% after Q1-print: buy, sell or hold?

Broadcom reported first-quarter earnings on Thursday that exceeded analysts’ expectations, driven by strong AI-related revenue growth.

The semiconductor giant also provided an upbeat revenue forecast for the current quarter, sending its stock over 10% higher in extended trading.

Broadcom’s Q1 earnings

The company posted adjusted earnings per share of $1.60, surpassing the consensus estimate of $1.49.

Revenue came in at $14.92 billion, exceeding the expected $14.61 billion.

Broadcom’s second-quarter revenue guidance of approximately $14.9 billion also came in ahead of Wall Street’s forecast of $14.76 billion.

Revenue for the latest quarter grew 25% from $11.96 billion in the same period last year.

Net income rose to $5.5 billion, or $1.14 per share, up significantly from $1.33 billion, or 28 cents per share, in the year-ago period.

Broadcom’s stock had been down about 23% in 2025 before the earnings report, partly due to investor concerns over President Donald Trump’s tariff policies.

Broadcom recorded $4.1 billion in AI-related revenue in the first quarter, reflecting a 77% year-over-year increase.

AI sales are included in the company’s semiconductor solutions segment, which reported an 11% annual growth to $8.21 billion.

Broadcom CEO Hock Tan stated that the company anticipates “continued strength in AI semiconductor revenue.”

The company projects AI revenue to reach $4.4 billion in the second quarter, representing a 44% year-over-year growth.

In December, Broadcom announced it was developing custom AI chips with three large cloud customers.

Tan added on Thursday that the company has since “deeply engaged” with two additional hyperscalers and is working with four other potential customers on custom AI chip development.

Wall Street analysts on Broadcom

KeyBanc Capital Markets raised its price target on Broadcom to $275 from $260, maintaining an Overweight rating. A

Analysts cited Broadcom’s AI revenue strength, which exceeded expectations by $300 million, driven by robust networking demand.

Bernstein reaffirmed its Outperform rating with a price target of $250, noting Broadcom’s strong gross margins of 79.1% and lower-than-expected operating expenses.

While the core networking and storage businesses saw slower recovery, AI semiconductor sales offset those weaknesses.

Raymond James analyst Srini Pajjuri maintained a Market Perform rating, expressing caution despite Broadcom’s strong execution and customer engagement.

Pajjuri highlighted competition from Nvidia in the custom ASIC market, warning that potential customers may not move forward with large-scale deployments.

Broadcom’s earnings report and upbeat AI outlook signal strong demand for its semiconductor solutions, but ongoing competition and broader market conditions remain factors to watch.

CFRA also maintained a Buy rating on Broadcom Limited, citing the potential for AI semiconductor revenue to enhance Broadcom’s business model over the next three years.

CFRA also expects continued strong performance in the software segment, particularly following the one-year anniversary of the VMware acquisition.

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