Broadcom reported better-than-expected fourth-quarter earnings on Thursday and said artificial intelligence revenue for the year more than tripled.

The chipmaker’s stock jumped after Broadcom CEO Hock Tan said the company is developing custom AI chips with three large cloud customers. The shares were up 13% in extended trading.

Here’s how Broadcom did versus LSEG consensus estimates for the quarter ending Nov. 3:

• Earnings per share: $1.42, adjusted vs. $1.38 expected
• Revenue: $14.05 billion vs. $14.09 billion expected

Broadcom said it expects first-quarter revenue of about $14.6 billion, just ahead of the $14.57 billion average analyst estimate. For the fourth quarter, year-over-year revenue increased 51% from $9.3 billion.

Net income in the fourth quarter 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.

In its semiconductor solutions group, which includes the company’s artificial intelligence chips, revenue increased 12% to $8.23 billion from $8.03 billion a year ago.

Broadcom is seeing soaring demand from the boom in generative AI infrastructure. For the year, the company said AI revenue jumped 220% to $12.2 billion. Some of that growth is from ethernet networking parts, which are used to tie together thousands of AI chips.

“We see an opportunity over the next three years in AI,” Tan told investors on the earnings call. “Massive specific hyperscalers have begun their respective journeys to develop their own custom AI accelerators.”

Tan said Broadcom is currently developing AI chips with three very large customers, and he expects each of them them to deploy 1 million AI chips in networked clusters by 2027. Tan said the total market opportunity for its AI chips, which it calls XPUs, as well as parts for AI networking could be between $60 billion and $90 billion by 2027.

Broadcom said its infrastructure software division generated $5.82 billion in revenue for the quarter, nearly tripling from last year’s $1.96 billion. That includes a boost from the $69 billion acquisition of VMware, which was completed after the year-ago quarter.

Broadcom said it would increase its quarterly dividend by 11% in fiscal 2025 to 59 cents per share.

WATCH: Broadcom shares spike on earnings

Adobe shares fell 13% on Thursday and headed for their steepest drop since March after the software vendor issued disappointing revenue guidance.

Sales in the fiscal first quarter will be between $5.63 billion and $5.68 billion, Adobe said in its fourth-quarter earnings report late Wednesday. Analysts on average were expecting revenue of $5.73 billion, according to LSEG.

Analysts at TD Cowen downgraded the stock to hold from buy, while Wells Fargo kept its buy rating following what it called a “frustrating ’24” for the company. The stock is now down 20% for the year, badly trailing the Nasdaq, which is up 33% and crossed the 20,000 mark for the first time on Wednesday.

While Adobe’s forecast trailed estimates, the company’s fourth-quarter results exceeded expectations.

Adjusted earnings per share came in at $4.81, topping the average analyst estimate of $4.66, according to LSEG. Revenue in the fourth quarter increased 11% to $5.61 billion, beating the average estimate of $5.54 billion.

Monetizing generative artificial intelligence, especially in stand-alone offerings such as Firefly image generation or additional offerings across the Creative Cloud, has been central to Adobe’s growth strategy.

Analysts at Deutsche Bank maintained their buy rating but lowered their target price from $650 to $600.

“These results and guidance require a bit of faith in the full year next year,” the analysts wrote. Still, they said, “We see tangible evidence that Adobe is one of few application software companies in our coverage successfully monetizing generative AI today.”

Legislation was introduced in the Texas House of Representatives on Thursday to establish a strategic bitcoin reserve, which could serve as a proving ground for the U.S. Treasury.

The proposed bill would enable the state to start building a strategic bitcoin reserve by accepting taxes, fees and donations in bitcoin that would be held for a minimum of five years, Republican state Rep. Giovanni Capriglione announced on an X Spaces event Thursday.

The Texas bill aims to provide a way to strengthen the state’s fiscal stability and establish it as a leader in bitcoin innovation, according to the Satoshi Action Fund, a nonprofit bitcoin advocacy group that worked with Capriglione on the bill.

“Probably the biggest enemy of our investments is inflation,” Capriglione said. “A strategic bitcoin reserve, investing in bitcoin, would be a win-win for the state.”

“I just filed the bill … entitled ‘An act relating to the establishment of a bitcoin reserve within the state treasury of Texas and the management of cryptocurrencies by governmental entities,'” he said later.

Texas is not only the second-largest economy in the U.S. and the eighth-largest in the world, it also has the highest concentration of bitcoin miners in the country. The hope is that some of them will begin paying their taxes in cryptocurrency. The initial proposal does not include a direct bitcoin purchasing strategy.

“My goal is to make this bill as big and as broad as possible,” Capriglione said. “This initial step is to allow some optionality and flexibility on it, but if I am able to get support from other legislators, we will make it even stronger.”

The drumbeat for a national strategic bitcoin reserve – one of President-elect Donald Trump‘s crypto-friendly campaign promises – has grown louder since the election. Bitcoin has rallied more than 45% as hopeful investors bet the establishment of one will further boost its price.

There’s some doubt that the U.S. will actually establish a bitcoin reserve, or if it does, that it will be the first. Nevertheless, the idea of it could be a positive market catalyst in the next year and drive other nations to establish one whether or not the U.S. follows through.

It’s “unlikely to occur, but it helps get animal spirits back into the market,” Needham’s John Todaro told CNBC, adding that it’s also “unlikely to drive material price gains, as we do not expect the U.S. government will purchase bitcoin in any meaningful capacity, but it’s an item that drives excitement and optimism.”

Meanwhile, several states are keen to be the ones charting this new territory. Pennsylvania was the first state where a strategic bitcoin reserve bill was introduced, in November, and discussions are underway in as many as 10 more states and four countries to introduce similar legislation in the coming months, according to Dennis Porter, the CEO of Satoshi Action Fund.

Porter, who worked with Capriglione on the draft bill, has also aided lawmakers in other states on bitcoin-related legislation. Oklahoma, Louisiana, Montana and Arkansas have passed laws to protect the right to mine, right to self-custody, right to run a node, and the right to peer-to-peer transactions. Satoshi Action Fund has been involved in 30 bill introductions so far, including the one in Pennsylvania.

Trump said in July that “it will be the policy of my administration to keep 100 percent of all bitcoin the U.S. government currently holds or acquires in the future … as a core of the strategic national bitcoin stockpile,” speaking to attendees at the Bitcoin 2024 conference in Nashville. At the same event, Wyoming Republican Sen. Cynthia Lummis revealed her legislation to create a national strategic bitcoin reserve.