On Friday, Broadcom revealed a mixed third-quarter financial performance for fiscal year 2024 as its stocks plummeted.
The chipmaker’s stock closed the trading session by plunging by -10.35% to $137.00 per share. It plummeted on failed to impress investors, who were betting on solid demand for artificial intelligence (AI) chips to stir substantial growth.
Furthermore, its earnings per share (EPS) dipped by $1.24, better than analysts’ $1.21 forecast but lower than the previous $10.96 data.
However, Broadcom’s revenue surged by $13.07 billion, surpassing the experts’ anticipation of $12.97 billion and last quarter’s $12.49 billion.
In a post-earnings call, the firm executives reported a -49.00% revenue drop in their broadband division during Q3.
Additionally, the growth has been due to AI earnings, surged bookings from VMware, and steady non-AI semiconductor revenue.
Broadcom forecasts semiconductor revenue for Q4 to be around $8.00 billion, alongside infrastructure software earnings at $6.00 billion.
The firm expects AI revenue to increase successively, exceeding $3.50 billion in the next quarter.
Also, Broadcom anticipates a rebound in non-AI markets and significant growth in AI-related revenue during fiscal 2025.
The chipmaker ended the third quarter with $10.00 billion in cash and has taken initiatives to enhance its debt profile.
Broadband Weak as Telco Spending Pauses, Says Broadcom CEO
Broadcom CEO Hock Tan revealed that broadband remains sluggish due to persistent telecommunications and service provider spending pauses.
Tan added that the broadband business will continue to decline over -40.00 % year-over-year in the next quarter despite being forecasted to recover by 2025.
Meanwhile, the data has softened the strong demand for the company’s crucial AI-optimized chips. Broadcom has once again boosted its full-year sales projection for AI components and custom chips to $12.00 billion, up from its previous estimate of over $11.00 billion.
However, Tan did not provide any specific guidance for AI revenue in Broadcom’s 2025 fiscal year, but he did mention that it is expected to be robust.
