June 6 - Broadcom (AVGO, Financial) projected stronger-than-expected third-quarter revenue on Thursday, backed by sustained demand for its networking and custom AI chips.
The semiconductor firm guided revenue of about $15.80 billion for the quarter ending in August, slightly ahead of analysts' consensus of $15.71 billion, based on LSEG data.
Despite the beat, shares slipped 4% on Friday Morning. The dip followed a 3% decline in after-hours trading Thursday, as investors reacted cautiously following a sharp run-up in the stock, nearly 30% over the past month.
Broadcom has started shipping its new Tomahawk 6 networking chip, designed to double performance for AI data workloads. The chip is aimed at cloud infrastructure clients, including OpenAI and Alphabet's Google (GOOGL, Financial).
CEO Hock Tan said AI chip revenue is expected to climb to $5.1 billion in the current quarter, which would mark a tenth straight quarter of growth. However, non-AI chip sales remain sluggish and near a bottom, he noted on the earnings call.
The semiconductor division, which includes networking and data center components, brought in $8.41 billion in Q2, up nearly 17%.
Overall revenue for the quarter came in at $15 billion, narrowly topping forecasts.
