Palo Alto-based chipmaker and infrastructure software provider Broadcom (AVGO) announced its fiscal first-quarter results, surpassing expectations with robust earnings. However, the company chose to maintain its sales guidance for the full year. As a result, Broadcom stock experienced a slight drop in after-hours trading.

For the quarter ended February 4, Broadcom reported adjusted earnings of $10.99 per share on sales of $11.96 billion. Analysts had predicted earnings of $10.40 per share on sales of $11.8 billion, according to FactSet. Notably, the company's earnings increased by 6% year-over-year, while sales surged by 34% due to the recent acquisition of VMware. Excluding the contribution from VMware, Broadcom experienced an 11% increase in sales.

Broadcom reiterated its revenue guidance for the full year, remaining unchanged at $50 billion. This forecast includes a 40% increase with the addition of VMware. Within its revenue breakdown for the first quarter, semiconductor products accounted for 62%, while infrastructure software contributed 38%. Chip sales rose by 4% to $7.39 billion, while infrastructure software sales skyrocketed by 153% to $4.57 billion.

In response to the company's report, Broadcom stock dipped by approximately 1% during after-hours trading, reaching 1,395. However, during the regular trading session on Thursday, the stock showed strength, climbing by 4.2% to close at 1,407.01.

Broadcom's CEO, Hock Tan, praised the company's performance in a news release, highlighting the revenue growth generated by two significant drivers. The acquisition of VMware propelled revenue growth in the infrastructure software segment as customers increasingly deployed VMware Cloud Foundation. Additionally, strong demand for Broadcom's networking products in AI data centers, coupled with custom AI accelerators from hyperscalers, continued to drive growth in the semiconductor segment.

Broadcom, known for its diverse product portfolio encompassing semiconductor, enterprise software, and security solutions, designs and develops solutions for data centers, networking, broadband, wireless, storage, industrial, and enterprise software. The company remains on the IBD Tech Leaders list, and its stock broke out of an ascending base on January 19, reaching a record high on March 4 before experiencing a moderate pullback.

As Broadcom's Q1 results exceeded expectations, the market will closely monitor the company's performance in the future, especially as it continues to capitalize on its strong position in the tech sector.