Broadcom Q2 Soars 43%, Stock Hits Record High

Broadcom Inc., a leading semiconductor company, announced its financial results for the second quarter of fiscal year 2024, ending May 5, 2024, after the U.S. stock market closed on Wednesday, June 12. The company reported a 43% year-over-year increase in revenue, reaching $12.487 billion, surpassing analysts' expectations of $12.06 billion. Non-GAAP earnings per share rose by 6.2% year-over-year to $10.96, also beating the forecasted $10.85.

In addition, Broadcom has raised its revenue forecast for the fiscal year ending November 3, 2024, from $50 billion to $51 billion, including contributions from VMware. This revised forecast is above the analysts' expectation of $50.42 billion. The company increased its adjusted EBITDA margin from 60% to 61%.

The earnings release highlights that Broadcom's Semiconductor Solutions segment saw a 6% year-over-year revenue increase, reaching $7.202 billion. The Infrastructure Software segment experienced a significant 175% year-over-year surge in revenue, totaling $5.285 billion.

Hock Tan, Broadcom's President and CEO, attributed the second-quarter revenue growth to strong demand for artificial intelligence (AI) and contributions from VMware. AI product revenue reached a record $3.1 billion. As more enterprises adopt VMware's software stack to build private clouds, infrastructure software revenue growth has accelerated.

Broadcom's CFO, Kirsten Spears, noted that excluding VMware, the second-quarter revenue growth rate was 12% year-over-year. Spears also announced a 10-for-1 stock split, effective July 12, 2024, for shareholders of record as of July 11, 2024. Trading on a split-adjusted basis will commence on July 15, 2024.

On Wednesday, Broadcom's stock rose by 2.36%, closing at $1,495.51, a new record high. Year-to-date, the stock has increased by 33.98%. In after-hours trading, the stock continued to climb, gaining 14.62% to reach $1,714.19.