Broadcom Inc ( AVGO ) shares are trading higher Wednesday. The stock spiked late Tuesday after Alphabet Inc ( GOOG ) reported fourth-quarter results showing it expects to increase AI spending in 2025.

What To Know: Google ( GOOG ) reported fourth-quarter financial results after the market close on Tuesday. The company said it expects $75 billion in capital expenditures in 2025 related to its AI buildout. Google ( GOOG ) reported $52.5 billion in capital expenditures in 2024 and analysts had been expecting the company to spend about $58 billion in 2025, per Reuters.

There had been some concerns about AI spending leading up to earnings season after Chinese startup DeepSeek reportedly developed its open-source LLM in a couple of months at a much lower cost than competitors in the space.

Broadcom ( AVGO ) shares jumped late Tuesday as Google’s capital expenditures forecast lowered concerns of an AI spending slowdown. Google ( GOOG ) is one of Broadcom’s largest AI chip customers.

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Broadcom ( AVGO ) isn’t expected to report quarterly results again until early March. Analysts currently expect the company to report earnings of $1.49 per share and revenue of $14.63 billion, according to estimates from Benzinga Pro.

Last quarter, Broadcom ( AVGO ) reported mixed financial results. Chip revenue grew to a record $30.1 billion, driven by AI revenue of $12.2 billion, up 220% year over year. The company guided for first-quarter revenue of approximately $14.6 billion and adjusted EBITDA of approximately 66% of projected revenue.

"We see our opportunity over the next three years in AI as massive. Specific hyperscalers have begun their respective journeys to develop their own custom AI accelerators,” Broadcom ( AVGO ) CEO Hock Tan said on an earnings call in December.

AVGO Price Action: Broadcom ( AVGO ) shares were up 3.26% at $229.52 at the time of publication Wednesday, according to Benzinga Pro.