Broadcom misses on revenue, despite ongoing AI boom
Broadcom reported mixed quarterly results, with earnings beating expectations, while revenue fell slightly short of market forecasts. For Q2, the group posted adjusted EPS of $2.44, compared to the $2.40 expected, on revenue of $22.19bn, missing the $22.27bn consensus. This slight disappointment weighed on the stock, which fell nearly 7% in after-hours trading on Wall Street, despite a 48% y-o-y increase in revenue.
Artificial intelligence remains the primary growth driver. AI-related revenue more than doubled to $10.8bn, driven by demand for custom chips and networking equipment used in data centers. Broadcom notably provides essential technologies to several major AI players, including Google, Amazon, Meta and Microsoft. CEO Hock Tan expects AI revenue to reach approximately $16bn in the current quarter.
The semiconductor division generated $15.1bn in revenue, exceeding market expectations. In contrast, the infrastructure software business, bolstered by the 2023 acquisition of VMware, recorded $7.18bn in revenue, falling below analysts' forecasts. For the current quarter, Broadcom nevertheless anticipates revenue of approximately $29.4bn, ahead of expectations, confirming the strength of its outlook, despite the cautious investor reaction.
Broadcom Inc. specializes in designing, developing, and selling analog components and sub-systems, with mixed and optoelectronic signals. The group's products include power amplifiers, radio-frequency filters, encoders, optocouplers, fiber-optic transmitters and receivers, etc.
Net sales break down by market between semiconductors (57.7%) and infrastructures (42.3%).
Net sales are distributed geographically as follows: Americas (29.6%), Asia/Pacific (56.2%), and Europe/Middle East/Africa (14.2%).
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