Investing.com -- Broadcom's decision to lift its annual revenue guidance for its artificial intelligence-optimized chips has reinforced the semiconductor group's position as one of the largest beneficiaries of a boom in enthusiasm around AI, according to analysts at Barclays.
Revenue from the California-based company's AI-tied chips is now projected to be "over $11 billion," an increase from its prior forecast of roughly $10 billion.
Sales from the firm's AI products came in at $3.1 billion in the second quarter, up from around $2.3 billion in the preceding three-month period.
The Barclays analysts said the estimate -- which implies around $5.6 billion in second-half sales from the AI business, an uptick from $5.4 billion in the first six months of the year -- is "conservative and more of a base case scenario."
"[I]n our view [Broadcom] remains one of the best ways to play AI," they added.
For the second quarter, Broadcom (NASDAQ:AVGO) announced adjusted earnings per share (EPS) of $10.96 on revenue of $12.49 billion. Analysts polled by Investing.com had forecast EPS of $10.85 and revenue of $10.85 billion.
Revenue from semiconductor solutions, its core business that houses its custom chips division, rose 6% versus the same period last year to $7.20 billion. Sales at its infrastructure software segment, which includes cloud computing unit VMware, more than doubled to $5.29 billion.
Broadcom also increased its full-year overall revenue forecast by $1 billion to $51 billion. Annual adjusted earnings before interest, taxes, depreciation and amortization are also now seen at 61% of revenue, compared to a prior outlook of 60%.