Shares of Broadcom Corp. surged Wednesday on expected gains from sales of chips for Apple Computer Inc.’s video iPod.
Apple reported better-than-expected fourth quarter sales, largely driven by iPods. Broadcom makes a chip that handles video in iPods.
The company could see added sales and profits from the surging devices, according to UBS analyst Alex Gauna.
UBS raised its outlook for Broadcom’s sales for the fourth and first quarters. For the fourth quarter, Broadcom could see $800 million in sales, up from an earlier view of $780 million.
Broadcom’s fourth-quarter results are due Jan. 26.
For the first quarter, Broadcom could see $840 million in sales, up from an prior expectation of $755 million, Gauna said.
“The principle reason for our improved seasonal outlook is surging iPod and other video processor demand,” the analyst told Reuters.
The revision added fuel to the fire under Broadcom’s shares, which have doubled since May.
The company’s market value was above $20 billion on Wednesday. Broadcom’s shares and market value haven’t been as high since early 2001, just before they plunged in the technology meltdown.
