U.S. chipmaker Broadcom (AVGO) has announced a 10-for-1 stock split along with better-than-expected financial results.
Broadcom’s stock is up 12% after the company said that its shares will begin trading on a split-adjusted basis July 15.
The Silicon Valley-based company also reported first-quarter financial results that beat Wall Street estimates across the board.
Broadcom posted earnings per share (EPS) of $10.96 U.S. versus $10.84 U.S. that was expected among analysts.
Revenue in the quarter totaled $12.49 billion U.S. compared to $12.03 billion U.S. that was forecast on Wall Street.
Broadcom is benefiting from the current boom in artificial intelligence (A.I.) with its microchips and processors in high demand.
Management said that $3.1 billion U.S. in Q1 sales could be attributed to revenue from A.I. products.
The company is also getting a revenue boost from VMware, the enterprise software company it acquired for $69 billion U.S. in 2023.
The company’s overall revenue was up 43% on an annual basis during the quarter. Without VMware sales, it would have been up 12% on a year-over-year basis.
In terms of guidance, Broadcom said that it expects $51 billion U.S. in sales this fiscal year, which is slightly above Wall Street consensus targets of $50.42 billion U.S.
Prior to today, Broadcom’s stock had risen 38% on the year and was trading at $1,495.51 U.S. per share.
At current levels, the 10-for-1 stock split would reduce Broadcom’s share price to just under $150 U.S. per share.
