Broadcom (AVGO -1.53%) shares rose 4.3% on Thursday, following strong results from a key AI player.
AI Demand Persists
Taiwan Semiconductor Manufacturing Co. (TSMC) reported a 39% year-over-year revenue increase to approximately $23.5 billion, driven by strong chip demand for AI and smartphones. Their earnings per share (EPS) rose 54% to $1.94, surpassing analyst expectations.
In contrast, ASML reported mixed results and lowered its 2025 forecast, prompting some investor concerns.
Future Outlook
Broadcom, which supplies critical products for data centers used in AI, recently completed a 10-for-1 stock split. Executives noted ongoing strong demand for AI networking tools. Despite worries about a potential slowdown in AI adoption, TSMC’s results suggest sustained interest.
Broadcom’s stock trades at 160 times earnings, but anticipated earnings of $6.15 in 2025 could suggest a more reasonable 28 times next year’s earnings, presenting a valuable investment opportunity in the AI infrastructure space.
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