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.

Broadcom shares surged in after-hours trading on Thursday as the chip designer announced better than expected revenue and a confident outlook around artificial intelligence. The company, which designs custom AI chips and infrastructure for the biggest tech companies,

Sales will be about $14.9 billion in the three-month period ending May 4, Broadcom said in a statement Thursday. Analysts had estimated $14.6 billion on average, with some projections surpassing $15.1 billion.

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.

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