Broadcom’s stock jumped 12% in premarket trading on Mar. 7, after CEO Hock Tan projected US$4.4 billion in Q2 revenue for its AI semiconductor division.

The surge is driven by hyperscale customers investing in custom AI chips for data centers.

Broadcom benefits from tech firms seeking alternatives to Nvidia’s costly and supply-limited AI processors, with reports indicating OpenAI is collaborating with the company on custom chip designs.

The rally comes amid a broader semiconductor market decline. Marvell Technology’s weak revenue outlook led to a 19.8% drop in its shares on Mar. 6, its worst single-day performance in over 20 years.

Other chipmakers, including Nvidia, Micron, and AMD, saw premarket gains of 0.4% to 1.7%.

Despite more than doubling in 2024, Broadcom’s stock has fallen about 23% in 2025.

Its 12-month forward price-to-earnings ratio stands at 26.58, compared to Nvidia’s 23.46 and Marvell’s 24.50, according to LSEG data.

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