Broadcom's latest revenue forecast indicates that the surge in artificial intelligence (AI) spending may not be as robust as some investors anticipated. The tech giant, which supplies chips to companies like Alphabet and Apple, announced its earnings, projecting revenue of approximately $15.8 billion for the fiscal quarter ending August 3. This figure slightly exceeds analysts' average estimate of $15.7 billion but falls about $1 billion short of some predictions.
This outlook suggests that investor optimism about AI driving Broadcom's growth may have been overly aggressive. Similar to NVIDIA, Broadcom is considered a major beneficiary of increased AI spending. Data centers rely on Broadcom's chips and network components to handle AI computing tasks.
Following the announcement, Broadcom's stock (AVGO, Financial) fell about 3% in after-hours trading. It closed at $259.93, marking a 12% increase for the year. For the fiscal quarter ending May 4, the company reported a 20% revenue increase to $15 billion, with earnings per share of $1.58 after excluding certain items, slightly surpassing analysts' expectations of $1.56 per share.
