Broadcom’s fourth-quarter revenue falls short of expectations despite AI revenue gains
Broadcom just reported lower-than-expected revenue guidance for the next quarter, with earnings expected to come in at $14 billion, down from Wall Street’s previous estimate of $14.04 billion.
That’s not a bad thing, though, because if Broadcom manages to generate $14 billion in revenue, that would represent a 51% increase over the same period last year.
It would also represent greater growth than the most recent quarter, when revenue rose 47% from the previous year to $13.07 billion.
The company’s CEO Hock Tan commented: “Broadcom’s third quarter results reflect the continued strength of our AI semiconductor solutions and VMware.” The company expects about $12 billion of its fiscal year revenue to come from AI, accounting for nearly a quarter of the company’s revenue. This estimate marks a $1 billion increase from previous forecasts.
Despite the positive outlook, the company continues to struggle with numbers elsewhere, reporting a net loss of $1.88 billion for the most recent three-month period.
Kinngai Chan, senior research analyst at Summit Insight, said of the company’s growth (via Reuters): “We believe it is unreasonable for investors to expect Broadcom to report results and guidance similar to Nvidia’s.”
Broadcom shares have risen 75.2% over the past 12 months, but the numbers have been turbulent in recent months, not least because of some uncertainty surrounding the changes it has been making at VMware. Tan added: “VMware’s transformation continues to go very well.”
Additionally, a post-earnings conference call confirmed that the AI division performed well, but that other areas, such as broadband and non-AI networking, saw significant declines.