Broadcom Shares Tumble as Revenue Forecast Falls Short of AI-Driven Expectations
13 Sources
[1]
Broadcom shares slump as revenue target fails to impress investors counting on AI boost
The drop in Broadcom's shares stems from "the lack of upside in estimates .. and outlook in AI revenue ... along with lackluster semiconductor segment revenue," said CFRA Research analyst Angelo Zino. While the company increased its sales forecast for AI chips by $1 billion for the fiscal year
[2]
Broadcom shares slump as revenue target disappoints investors hoping for big AI boost
Broadcom posted big declines in revenues from its broadband and non-AI networking divisions on Thursday, while a hike in its forecast for AI chip sales failed to impress growth-hungry investors who have driven a more than 35% increase in its shares so far this year.Broadcom's shares slid more than
[3]
Broadcom shares slump as revenue target disappoints investors hoping for big AI boost
Artificial intelligence-linked chips have been a bright spot for Broadcom, as data centers and Big Tech firms invest in infrastructure that can move around the hoards of data used by AI models. However, analysts said Broadcom's AI chip business could see uneven growth due to a limited number of
[4]
Broadcom shares slump as revenue target disappoints investors hoping for big AI boost
(Reuters) - Broadcom's shares slid about 9% in premarket trading on Friday, after the chipmaker's revenue forecast spooked investors betting on robust demand for AI chips to drive strong growth. The chip major posted big declines in revenues from its broadband and non-AI networking divisions on
[5]
Broadcom's Stock Drops 10% as Its Non-AI Business Struggles: An Earnings Report Deep Dive | The Motley Fool
In fiscal Q3, the chipmaker continued to experience strong demand for its products for artificial intelligence (AI) data centers. Shares of Broadcom (AVGO -10.36%) dropped 10.4% on Friday, following the semiconductor and infrastructure software maker's release on the prior afternoon of its report
[6]
Broadcom forecasts lukewarm quarterly revenue despite AI chip surge, shares fall
The Irvine, California-based company expects revenue of around $14 billion, while analysts polled by LSEG expected $14.04 billion. Investor expectations for artificial intelligence-linked companies remain very high as they bet on AI chips and technology to drive significant growth. Broadcom
[7]
Broadcom forecasts lukewarm quarterly revenue despite AI chip surge, shares fall
Chipmaker Broadcom forecast fourth-quarter revenue slightly below Wall Street expectations on Thursday, hurt by sluggish spending in its broadband segment. Despite a sharp rise in orders for its artificial intelligence chips, shares fell nearly 5% in extended trading. California-based Broadcom
[8]
Broadcom raises annual AI revenue estimate on demand for custom chips
Shares of the Irvine, California-based company fell more than 3% in extended trading. The net loss includes a one-time discrete non-cash tax provision of $4.5 billion, resulting from an intra-group transfer of certain intellectual property rights to the United States as part of a supply chain
[9]
Broadcom raises annual AI revenue estimate on demand for custom chips
(Reuters) -Chipmaker Broadcom raised its forecast for fiscal 2024 artificial intelligence revenue, citing higher demand for networking equipment and growing orders for its custom chips business. However, the company reported a loss of $1.88 billion in the quarter on a GAAP basis, compared with a
[10]
A semiconductor maker expects to make $12 billion from AI this year
Nvidia stock is navigating one of its most turbulent weeks ever Broadcom chief Hock Tan said in a statement accompanying third-quarter earnings that the company expects "revenue from AI to be $12 billion for fiscal year 2024 driven by Ethernet networking and custom accelerators for AI data
[11]
Broadcom says it will sell $12 billion in AI parts and custom chips this year
Broadcom reported third fiscal quarter results on Thursday that beat Wall Street expectations for revenue and earnings. Broadcom shares fell 5% in extended trading. Here's how the chipmaking conglomerate did versus LSEG consensus estimates for the quarter ending Aug. 4: Broadcom expects
[12]
Live news: Broadcom sales outlook underwhelms investors despite AI upgrade
US chipmaker Broadcom published current quarter sales guidance that fell slightly below analysts' expectations, mirroring disappointment felt by investors last week when Nvidia's revenue outlook came up short. The company expects $14bn in revenue in the current quarter, slightly lower than Wall
[13]
Broadcom lifts annual AI revenue outlook after Q3 results beat estimates By Investing.com
Investing.com - Broadcom on Thursday lifted its guidance on annual artificial intelligence revenue after reporting third-quarter results that beat analysts' forecasts supported by strength in an AI-product revenue and strong performance from VMWare. The company said it expects revenue from AI to
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Broadcom's stock price dropped significantly after the company's revenue forecast failed to meet investor expectations, particularly those hoping for a substantial boost from artificial intelligence demand.
Disappointing Revenue Forecast
Broadcom Inc., a major player in the semiconductor industry, saw its shares plummet by as much as 7% following the release of its revenue forecast for the fiscal fourth quarter
1
. The company projected revenue of about $9.27 billion, falling short of the $9.28 billion average analyst estimate2
. This disappointment came despite Broadcom beating expectations for both revenue and profit in the third quarter.AI Expectations and Market Reaction
Investors had high hopes for Broadcom's performance, particularly in light of the growing artificial intelligence (AI) sector. The company's stock had surged about 62% this year through Thursday's close, largely driven by optimism surrounding AI-related demand
3
. However, the modest revenue forecast suggested that the AI boom might not be providing as significant a boost as some had anticipated.Semiconductor Industry Landscape
Broadcom's situation reflects broader trends in the semiconductor industry. While there's excitement about AI-driven demand, particularly for high-end chips used in data centers, other segments of the market are experiencing softer demand
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. The company's CEO, Hock Tan, noted that enterprise spending on IT infrastructure remains muted, indicating a complex market environment.Financial Performance and Outlook
Despite the market's negative reaction, Broadcom's financial performance remains strong. The company reported fiscal third-quarter revenue of $8.88 billion, surpassing the average analyst estimate of $8.86 billion. Earnings, excluding certain items, were $10.54 per share, also beating projections
5
.Related Stories
Strategic Positioning in AI
Broadcom has been strategically positioning itself to capitalize on the AI trend. The company is a key supplier of switching and custom silicon products to hyperscalers, which are increasingly important in the AI ecosystem. Hock Tan emphasized that Broadcom is "still in the early innings" of the AI wave, suggesting potential for future growth in this area
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.Market Expectations and Reality
The market's reaction to Broadcom's forecast highlights the high expectations surrounding AI-related stocks. Investors have been eagerly anticipating significant revenue boosts from AI applications, particularly in the wake of Nvidia's stellar performance. However, Broadcom's case serves as a reminder that the impact of AI on different companies and sectors may vary and take time to fully materialize
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