Broadcom shares rallied after the company posted strong first-quarter earnings and guidance and signaled ongoing AI demand.

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 CEO on Thursday assuaged investor worries about AI chip demand with a strong second-quarter forecast and hinted about new potential customers that could boost revenue in a highly competitive market.