Broadcom Stock Is Rising Wednesday: What's Going On?

Broadcom Inc AVGO shares are trading higher Wednesday. The stock spiked late Tuesday after Alphabet Inc GOOG reported fourth-quarter results showing it expects to increase AI spending in 2025.

What To Know: Google reported fourth-quarter financial results after the market close on Tuesday. The company said it expects $75 billion in capital expenditures in 2025 related to its AI buildout. Google reported $52.5 billion in capital expenditures in 2024 and analysts had been expecting the company to spend about $58 billion in 2025, per Reuters.

There had been some concerns about AI spending leading up to earnings season after Chinese startup DeepSeek reportedly developed its open-source LLM in a couple of months at a much lower cost than competitors in the space.

Broadcom shares jumped late Tuesday as Google’s capital expenditures forecast lowered concerns of an AI spending slowdown. Google is one of Broadcom’s largest AI chip customers.

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Broadcom isn’t expected to report quarterly results again until early March. Analysts currently expect the company to report earnings of $1.49 per share and revenue of $14.63 billion, according to estimates from Benzinga Pro.

Last quarter, Broadcom reported mixed financial results. Chip revenue grew to a record $30.1 billion, driven by AI revenue of $12.2 billion, up 220% year over year. The company guided for first-quarter revenue of approximately $14.6 billion and adjusted EBITDA of approximately 66% of projected revenue.

"We see our opportunity over the next three years in AI as massive. Specific hyperscalers have begun their respective journeys to develop their own custom AI accelerators,” Broadcom CEO Hock Tan said on an earnings call in December.

AVGO Price Action: Broadcom shares were up 3.26% at $229.52 at the time of publication Wednesday, according to Benzinga Pro.

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