Broadcom sees $10 billion in AI chip sales in 2024, but shares dip
Broadcom said on Thursday it expects $10 billion in revenue from chips related to artificial intelligence this year, but its stock dipped after the tech company's full-year forecast failed to impress investors.Smaller rival Marvell Technology's forecast revenue below market expectations, sending its stock down over 6% in extended trading.
Both companies are being closely watched by investors who believe they will capture a piece of the boom in AI technologies such as OpenAI's ChatGPT or Google's Gemini.
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During an earnings call with analysts, Broadcom Chief Executive Hock Tan said that about $7 billion of the firm's AI chip revenue in 2024 would come from helping just two major clients design custom AI chips. Tan did not name the customers, but analysts widely believe that they are Alphabet's Google and Facebook owner Meta Platforms .
Tan also said that the custom chip business «can command margins similar to our corporate gross margin.» That gross margin was about 75% on an adjusted basis for the fiscal first quarter. Reuters reported last month
