Broadcom Inc., a chip supplier for Apple Inc. and other big tech companies, soared in late trading after an upbeat forecast reassured investors that spending on artificial intelligence computing remains healthy.

KEY TAKEAWAYS Broadcom shares are surging in premarket trading Friday after the chipmaker posted quarterly results and an outlook that topped analysts’ expectations on the back of robust demand for its artificial intelligence semiconductors.

During a conference call with analysts, Tan said Broadcom was ramping up production of AI chips for hyperscalers — a term that describes giant data center operators. He said the company’s custom semiconductors can be more effective in some cases than general-purpose accelerator chips, the kind of product sold by Nvidia Corp.

Broadcom's shares soared 12% in premarket trading on Friday as the chipmaker's strong revenue forecast helped restore some confidence in AI chip demand after a bruising sector-wide selloff following rival Marvell Technology's bleak outlook.