Broadcom (AVGO), a major player in the semiconductor and infrastructure software industry, reported fiscal third-quarter results that narrowly surpassed Wall Street's expectations but issued a weaker-than-anticipated sales forecast for the upcoming quarter. The company reported adjusted earnings of $1.24 per share on revenue of $13.07 billion for the quarter ending August 4, 2024. These figures slightly exceeded analyst forecasts, which projected earnings of $1.22 per share and revenue of $12.98 billion. Broadcom’s earnings increased by 18% year-over-year, while revenue surged by 47%, largely due to the November 2023 acquisition of VMware.
However, Broadcom’s guidance for the fiscal fourth quarter was less optimistic, with the company forecasting sales of approximately $14 billion, below analysts' expectations of $14.11 billion. Following the announcement, AVGO stock dropped 4.8% in after-hours trading, extending a 0.8% decline during the regular session, closing at $152.82.
CEO Hock Tan emphasized Broadcom’s strength in AI semiconductor solutions and VMware contributions, with AI revenue now projected to hit $12 billion in fiscal 2024, up from the previous $11 billion target. Broadcom's AI chip production includes custom-designed application-specific integrated circuits (ASICs) for major tech companies like Google, Meta Platforms, ByteDance, OpenAI, and an unnamed client.
Broadcom’s third-quarter performance showed a 4% year-over-year revenue increase excluding VMware, according to CFO Kirsten Spears. Despite the strong financial results, the stock remains volatile amid a broader market pullback, particularly in tech.
Broadcom remains a key player in the AI space and is on the IBD Tech Leaders list. However, the company’s near-term outlook has tempered market enthusiasm, with investors weighing the potential impact of macroeconomic factors and competition in the rapidly evolving AI semiconductor industry.
However, Broadcom’s guidance for the fiscal fourth quarter was less optimistic, with the company forecasting sales of approximately $14 billion, below analysts' expectations of $14.11 billion. Following the announcement, AVGO stock dropped 4.8% in after-hours trading, extending a 0.8% decline during the regular session, closing at $152.82.
CEO Hock Tan emphasized Broadcom’s strength in AI semiconductor solutions and VMware contributions, with AI revenue now projected to hit $12 billion in fiscal 2024, up from the previous $11 billion target. Broadcom's AI chip production includes custom-designed application-specific integrated circuits (ASICs) for major tech companies like Google, Meta Platforms, ByteDance, OpenAI, and an unnamed client.
Broadcom’s third-quarter performance showed a 4% year-over-year revenue increase excluding VMware, according to CFO Kirsten Spears. Despite the strong financial results, the stock remains volatile amid a broader market pullback, particularly in tech.
Broadcom remains a key player in the AI space and is on the IBD Tech Leaders list. However, the company’s near-term outlook has tempered market enthusiasm, with investors weighing the potential impact of macroeconomic factors and competition in the rapidly evolving AI semiconductor industry.