Shares of Broadcom Inc. ( AVGO ) climbed 12.7% during the pre-market trading session on Friday following the company’s first quarter earnings and revenue beat.

What Happened: Broadcom ( AVGO ), a leading semiconductor company, reported first quarter revenue of $14.92 billion, surpassing the forecasted $14.61 billion on Thursday. The company’s adjusted earnings stood at $1.60 per share, exceeding the anticipated $1.49 per share.

The company’s total revenue saw a 25% year-over-year increase, led by a robust performance in AI semiconductor solutions and infrastructure software. Broadcom reported $6.11 billion in cash flow from operations and $6.01 billion in free cash flow for the quarter, concluding with approximately $9.31 billion in cash and cash equivalents.

First quarter AI revenue for the company grew 77% year-over-year to $4.1 billion and infrastructure software revenue grew 47% year-over-year to $6.7 billion.

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Why It Matters: These results come amid speculation around a potential merger and acquisition with Intel Corp ( INTC ). . However, CEO Hock Tan dismissed these rumors during the company’s first-quarter earnings call. This week, reports indicated that Nvidia ( NVDA ) and Broadcom ( AVGO ) are running manufacturing tests with Intel ( INTC )‘s 18A process

The company expects continued growth in AI semiconductor revenue of $4.4 billion in the second quarter, led by ongoing investment in AI XPUs and custom solutions for AI data centers by hyperscale partners. Meanwhile, Broadcom’s board has also authorized a quarterly cash dividend of 59 cents per share, which will be paid on March 31 to shareholders recorded as of March 20.

Kinngai Chan, analyst at Summit Insights stated, “Broadcom is much better positioned compared to its peers as its exposure in AI market is relatively more diversified with multiple AI ASIC customers,” reported Reuters. Meanwhile, The Future Fund LLC Managing Partner Gary Black highlighted Broadcom's ( AVGO ) strong performance, stating that it should help AI stocks the next day.

Broadcom’s stock dropped 6.33% to close at $179.45 on Thursday. However, it recovered in after-hours trading, surging by 12.82%. So far this year, the stock has dropped 22.64%, as per Benzinga Pro data.

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Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.