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In a deteriorating economy, where both consumer and enterprise spending is on a decline, AI has emerged as a bright spot for chip firms like Nvidia (NASDAQ:NVDA) and Broadcom (NASDAQ:AVGO), thanks to the strong potential applications of the technology as illustrated by OpenAI’s chatbot ChatGPT.
While analysts spotted green shoots in the AI space, they also saw weakness emerge in areas such as broadband and cloud spending.
“We are also seeing its end-market demand becoming more mixed,” Summit Insights Group analyst Kinngai Chan said.
Still the company saw strong infrastructure demand across all its end markets in the first quarter, Chief Executive Hock Tan said. Revenue in the quarter rose 16% to $8.92 billion.
Broadcom, which supplies chips used in data centers for networking as well as specialized chips that speed up AI work, announced a quarterly dividend of $4.60 per share. The San Jose, California-based company’s shares pared gains and were up 0.3% in extended trading.
The chip designer expects current-quarter revenue to be about $8.7 billion, while analysts on average expect $8.59 billion, according to Refinitiv data.
Excluding items, the company earned $10.33 per share for the first quarter, beating estimates of $10.10.
