(Reuters) -Broadcom Inc forecast second-quarter revenue above estimates on Thursday, as increased investments in artificial intelligence spurs demand for its chips used in data centers.
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 and Broadcom (NASDAQ:AVGO), thanks to the strong potential applications of the technology as illustrated by OpenAI's chatbot ChatGPT.
Broadcom supplies chips used in data centers for networking as well as specialized chips that speed up AI work.
The Apple Inc (NASDAQ:AAPL) supplier is also expected to gain from pent up demand for iPhones after Apple grappled with production hurdles in China in the latter half of last year.
Shares of San Jose, California-based Broadcom rose 1.3% 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.
Revenue for the three-month ended Jan. 29 was $8.92 billion, compared with analysts' average estimate of $8.90 billion.