Broadcom will report second-quarter earnings on Wednesday afternoon amid supercharged growth in its AI chip business.

Wall Street analysts expect adjusted earnings per share of $2.40, up from $1.58 a year earlier, on revenue of $22.1 billion, a 47% increase. Both would be new records for the company. Sales and earnings growth are projected to accelerate through the remainder of the year, so investors will have a close eye on third-quarter guidance.

Broadcom's chip business is positioned in two ways to benefit from the AI data center boom. While Nvidia still leads in AI computing chips, Broadcom designs custom alternatives for six customers, including Alphabet and OpenAI. The Alphabet partnership is a decade old, and the companies have now developed eight generations of Google's Tensor Processing Unit, or TPU, chips.

On Monday afternoon, Alphabet announced that it would sell $80 billion in equity to fund future AI capital expenditures. The company expects to spend up to $190 billion this year, and says that capex will "significantly increase" in 2027. Investors may have been reminded that Broadcom is downwind of that spending, and the stock rose 4.7% the following day.

Broadcom has long been a leader in networking chips, another major contributor to its AI data-center business. Combining computing and networking chips, sales came in at $8.4 billion in the first quarter, double the year-earlier period. The company is targeting $100 billion for AI chip sales in 2027.

Broadcom also has software which it acquired in the years leading up to the AI boom. It was brought in to balance out the highly cyclical sales and earnings from chips, but now that segment is getting overrun by AI chip sales. Last year, software represented 42% of Broadcom revenue, but that's expected to drop to 20% next year. Still, analysts are projecting software revenue growth of about 11% in the second quarter.

Broadcom shares were up 2.8% in premarket trading Wednesday.