Earnings season refuses to end. While others may have had enough, earnings reports are my lifeblood! Well, that and 1,500 milligrams of caffeine a day.
I’m glad earnings season rages on because it gives us the very latest insights on all things AI. This is super helpful information as I embark for the Super Bowl of tech conferences: the Goldman Sachs Communacopia tech gathering. More on that in a moment.
The past two weeks have been bonkers for the AI investment thesis. Any talk about peak AI needs to be tossed aside.
Broadcom’s (AVGO) revenue surged 86% year over year in its most recent quarter. Adjusted earnings per share exploded 96%. Both metrics easily thumped analyst estimates.
The massive outperformance was fueled by relentless hyperscaler demand for custom AI chips and networking gear, with quarterly AI semiconductor revenue alone tripling to $16.7 billion.
“We are giving you a judged number of $115 billion of chips to these guys [six key Broadcom hyperscaler customers like Meta and Google] in fiscal 2027, another $230 billion in 2028, which would add up … to about $350 billion. Another way of saying this is we believe with a pretty high degree of confidence, we will ship $350 billion of AI semiconductors to these customers in the next two years,” the always colorful Broadcom CEO Hock Tan said on the earnings call.
It was silly to see Broadcom shares get punished on this quarter and outlook. Lunacy!
The upbeat AI message from Broadcom wasn’t too different from what investors heard from Dell (DELL) and Nvidia (NVDA) recently.
Dell served up a revenue outlook that was $25 billion above estimates. Nvidia said its sales may grow 70% in its next fiscal year. Growth for Nvidia could be over 100% if it could get component supply.
Then there was Hewlett-Packard Enterprise (HPE).
Hewlett-Packard generated revenue of $12.21 billion in its fiscal third quarter, the company reported late Wednesday, up 34% year over year. Adjusted earnings per share climbed over 30% to $1.11.
Both the top- and bottom-line figures comfortably surpassed Wall Street consensus estimates.
The strong outperformance was propelled by booming enterprise appetite for AI servers and high-performance networking infrastructure, lifting orders and expanding the company’s backlog to record levels.
Despite raising its full-year revenue growth outlook to as high as 37%, HPE’s stock fell as investors took profits following the stock’s strong run-up into the report. Nuts!
I asked Hewlett Packard Enterprise CEO Antonio Neri what his customers are asking to buy from him right now during the AI boom.
“They’re asking to buy everything that we have in our amazing portfolio, from networking to cloud and AI solutions,” Neri said.
That sums things up nicely, I fancy.
I am a day out from descending on San Francisco for Goldman Sachs’ Communacopia tech conference. It’s one of my favorite conferences of the year, offering direct access to some of the biggest newsmakers in the world of tech.
By extension, this gives you direct access because I am going to share everything I learn! I’m really psyched to share with you all the insights I snag as we gear up for possibly historic IPOs from OpenAI (OPAI.PVT) and Anthropic (ANTH.PVT).
Over the course of two days, I will do roughly 20 C-suite interviews. Call it my version of a fitness competition applied to work. Coverage will kick off on Opening Bid on Tuesday, Sept. 8.
Brian Sozzi is Yahoo Finance’s Executive Editor, host of the ‘Power Players With Brian Sozzi’ podcast and a member of Yahoo Finance’s editorial leadership team. Follow Sozzi on X @BrianSozzi, Instagram, and LinkedIn. Tips on stories? Email brian.sozzi@yahoofinance.com.
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