Broadcom shares rose sharply in aftermarket trade on Wednesday after the artificial intelligence chips maker delivered a quarterly top and bottom-line beat and provided current quarter revenue guidance that surpassed expectations.

The company also announced a buyback of up to $10 billion.

Broadcom shares rose about 4.5% by 18:37 ET after initially whipsawing after its earnings. They had risen 1.2% during Wednesday’s session.

For fiscal Q1 2026, Broadcom earned $2.05 per share on an adjusted basis on revenue of $19.31 billion. Analysts had expected earnings of $2.02 per share on revenue of $19.21 billion.

Turning to AVGO’s guidance, the chip designer expects Q2 revenue to be about $22 billion, compared to a consensus estimate of $20.4 billion. AI semiconductor revenue is expected to be $10.7 billion.

"Broadcom achieved record first quarter revenue on continued strength in AI semiconductor solutions. Q1 AI revenue of $8.4 billion grew 106% year-over-year, above our forecast, driven by robust demand for custom AI accelerators and AI networking," top boss Hock Tan said in a statement.

Palo Alto, California-based Broadcom is a major player in the semiconductor and infrastructure software solutions industries. The company designs artificial intelligence chips, while its other semiconductor products span several markets such as networking connectivity, wireless devices, servers and storage systems, and broadband. Its infrastructure software solutions cater to areas such as private cloud, cybersecurity, and enterprise software.

Broadcom’s rivals include other chip designers such as Nvidia and Qualcomm. Broadcom has gained significance as a viable alternative to Nvidia for hyperscale cloud providers such as Alphabet and Meta Platforms to make microchips known as application-specific integrated circuits (ASICs).

“The last four quarters for AVGO have seen ASICs move from a second source to a real competitive option for major customers – especially Google who has begun to sell externally as well,” Jefferies analyst Blayne Curtis said in an earnings preview note last week.

Broadcom’s quarterly results come at a time when the AI trade has been under pressure. In the span of a few weeks, investors’ perceptions have quickly moved from “AI will lift the entire technology sector” to “AI will result in clear winners and losers.” Sub-sectors such as software, office and enterprise services, and food delivery have been identified as areas which will see major disruption from AI.

AI bellwether Nvidia last week delivered strong quarterly results and provided better-than-expected revenue guidance. However, the report failed to allay concerns about AI’s returns and companies’ massive spending plans around the technology.

“AVGO and NVDA have been unable to shake the overarching capex/macro fears, with NVDA down on a borderline perfect print,” Jefferies’ Curtis had noted.

“We still fundamentally believe both AVGO and NVDA are poised for breakouts as valuations are too depressed. NVDA earnings suggest the print will not be that catalyst, but we continue to view AVGO and NVDA as the most certain AI winners in our space trading at basement bargain multiples,” he had added.