Shares of Broadcom Inc ( AVGO ) soared by 14.47% in premarket trading on Friday, as per Benzinga Pro. This follows the company’s release of its fourth-quarter earnings. Despite mixed results, CEO Hock Tan emphasized the company’s promising future in artificial intelligence.

What Happened: Broadcom ( AVGO ) saw a 14.47% increase in premarket trading on Friday following the release of its fourth-quarter earnings after Thursday’s market close. CEO Tan addressed analysts, emphasizing a significant opportunity in artificial intelligence over the next three years.

“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 or XPUs, as well as network these XPUs with open and scalable Ethernet connectivity,” he said.

See Also: Dogecoin Drops 14%, Shiba Inu Sinks 17%: What’s Behind The Decline?

Tan revealed that three hyperscale customers have multi-generational AI XPU roadmaps, planning to deploy 1 million XPU clusters by 2027. This could create a serviceable addressable market for AI-related products ranging from $60 billion to $90 billion in fiscal 2027 alone.

Broadcom ( AVGO ) aims to capture a leading market share in this area, projecting a strong increase from its 2024 AI revenue base of $12.2 billion. The company has also been selected by two additional hyperscalers for advanced AI XPU development, potentially expanding its market further before 2027.

Why It Matters: The recent earnings report from Broadcom revealed a mixed performance, with earnings per share surpassing expectations at $1.42 compared to the consensus estimate of $1.38. However, revenue slightly missed forecasts, coming in at $14.05 billion against the expected $14.09 billion. Despite this, the company saw a substantial increase from the previous year’s $9.295 billion in sales. The company also reported a non-GAAP net income of $6.965 billion and generated $5.482 billion in free cash flow for the fourth quarter.

Former House Speaker Nancy Pelosi (D-Calif.), known for her active stock market investments as a member of Congress, disclosed in June that she had acquired call options on Broadcom ( AVGO ). These options, adjusted to a strike price of $80 after a 10-for-1 stock split, are set to expire in June 2025.

Nancy Pelosi, a widely followed Congressional trader, has drawn significant attention to her stock holdings, inspiring dedicated Pelosi portfolio trackers. Her recent purchase of Broadcom ( AVGO ) call options came shortly after the company reported its second-quarter results on June 12.

Read Next: 

Trump Announces Plans To Have Dinner With Amazon Founder Jeff Bezos As Billionaire Rivals Turn Unexpected Allies After Years Of Clashes

Image via Shutterstock

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