Broadcom stock closes up 24%, pushing company past $1 trillion market cap for the first time

• Shares of Broadcom closed up more than 24% Friday, pushing the company's market cap beyond $1 trillion for the first time.
• For the year, the company said artificial intelligence revenue jumped 220% to $12.2 billion.
• Broadcom reported $14.05 billion in revenue for the fourth quarter, up 51% year over year.

Shares of Broadcom closed up more than 24% Friday, pushing the company's market cap beyond $1 trillion for the first time. It's Broadcom's best trading day on record.

The move comes after the company reported fourth-quarter results that beat Wall Street's expectations for earnings and showed strong artificial intelligence revenue growth.

Broadcom reported $14.05 billion in revenue for the fourth quarter, up 51% year over year but shy of the $14.09 billion expected by analysts according to LSEG. In Broadcom's semiconductor solutions group, which includes its AI chips, revenue increased 12% to $8.23 billion from $8.03 billion a year ago.

The company said AI revenue jumped 220% for the year to $12.2 billion. The stock popped in after-hours trading Thursday when Broadcom CEO Hock Tan said the company is developing custom AI chips with large cloud customers.

Broadcom's net income came in at $4.32 billion, or 90 cents per share, up 23% from $3.52 billion, or 83 cents per share, in the same quarter a year earlier.

Bernstein analysts wrote in a Friday note that Tan might look good in a leather jacket, a nod to Nvidia CEO Jensen Huang's signature style. They said there were a lot of nerves ahead of Thursday's results, but Broadcom's fourth-quarter earnings were "decent" and they were encouraged by management's near-term and longer-term vision for AI.

The analysts raised their price target on the stock to $250 from $195.

"Overall the AI story seems to really be coming into its own," the analysts wrote.

Analysts at Bank of America reiterated their buy rating on the stock, in part because of its "surging AI opportunity." They said Broadcom currently dominates the market for custom chips for internal workloads, but they cautioned that there is some risk from the "stiff competition against NVDA's stronghold in merchant silicon and enterprise customers."

Morgan Stanley analysts said Broadcom's commentary around AI will likely add to long-term enthusiasm around the company, which they expect will continue to build. They said Broadcom remains "one of the most compelling ways to play AI semis" over the next two to three years.

"Overall, the quarter itself will provide a relief vs. low nearer term expectations, and the longer term commentary around AI will stoke enthusiasm for custom AI chip longer term prospects — enthusiasm that was already at a fever pitch," the analysts wrote in a Friday note.

— CNBC's Michael Bloom and Kif Leswing contributed to this report.