Broadcom’s shares (AVGO -0.90%) surged by up to 4.9% on Thursday, settling at a 4.3% increase by 1:52 p.m. ET. The rise was driven by strong results from a key player in the artificial intelligence (AI) sector.
AI Demand Persists
Taiwan Semiconductor Manufacturing Co. (TSMC) reported a 39% year-over-year revenue increase to 759.7 billion New Taiwan dollars ($23.5 billion), and a 54% rise in earnings per share (EPS) to NT$12.54 ($1.94). These results exceeded analyst expectations, driven by strong demand for AI and smartphone chips. TSMC predicts continued growth in the fourth quarter.
This contrasts with ASML, which reported good results but lowered its 2025 forecast, causing investor concern.
Future Outlook
Broadcom manufactures essential products for data centers that support AI technology. Following strong results, the company executed a 10-for-1 stock split in July. They expect ongoing strong demand for AI networking and custom accelerators.
While some investors are cautious about potential AI adoption slowdowns, TSMC’s performance suggests that demand is robust. Broadcom trades at 160 times earnings, but analysts project $6.15 EPS in 2025, making it 28 times next year’s earnings—a promising valuation for a key AI infrastructure provider.
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