Increased demand for AI products drives Broadcom shares surge on earnings beat.

• The stock price of Broadcom increased on Thursday due to the company's successful beating of both earnings and revenue expectations for the second quarter.
• Because of its position to expand in custom AI chips, Broadcom is viewed as a top AI investment opportunity by analysts.
• Broadcom announced a 10-for-1 stock split on Wednesday.

On Thursday, shares of the company rose about 12% after its second fiscal quarter earnings exceeded analysts' expectations and demonstrated the positive impact of the artificial intelligence industry.

LSEG consensus estimates of $10.84 per share were surpassed by Broadcom's reported earnings per share of $10.96. Additionally, Broadcom's revenue of $12.49 billion exceeded the expected $12.03 billion.

The chipmaker anticipates $51 billion in sales for its fiscal 2024 year, surpassing its earlier forecast and slightly exceeding analyst predictions of $50.42 billion.

Analysts see Broadcom as a beneficiary of increasing investments in AI.

Goldman Sachs analysts reiterated their Buy rating on Broadcom stock with a potential upside of 8% (versus AVGO's after-hour price of $1,713) and updated their 12-month price target to $1,850 (from $1,550 prior) in a note to investors on Thursday.

Analysts at Bank of America reaffirmed their buy rating for Broadcom and identified the company as a top AI investment opportunity due to its potential for growth in custom AI chips, Ethernet networking, and the ability to sell VMware to enterprise customers implementing AI.

The Bank of America analysts forecast FY24E sales at $51.5bn, higher than the guidance, due to the continued growth in AI, with FY25/FY26E sales growth raised to 16%/10% YoY from 14%/8% prior.

On Wednesday, Broadcom announced a 10-for-1 stock split, with shares beginning trading on a split-adjusted basis on July 15.

CNBC's Michael Bloom contributed to this report.