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Broadcom

Broadcom Expects $12 Billion in AI Chip Sales in Fiscal 2024 Amid Strong Q3 Results

Broadcom, the chipmaking conglomerate, reported fiscal third-quarter results that exceeded Wall Street expectations for both revenue and earnings. Despite the positive performance, Broadcom’s shares fell 7% in extended trading due to guidance that aligned with analyst projections. 

For the quarter ending on August 4, Broadcom outpaced LSEG consensus estimates with adjusted earnings per share of $1.24, surpassing expectations of $1.20. Revenue for the quarter reached $13.07 billion, slightly above the anticipated $12.97 billion. Looking ahead, the company forecasts fourth-quarter revenue of $14 billion, in line with analyst expectations of $14.04 billion, with earnings of $1.36 per share. 

Broadcom reported a net loss of $1.88 billion, or a loss of 40 cents per share, compared to a net income of $6.12 billion, or $1.24 per share, in the same quarter last year. The significant loss is attributed to a one-time tax provision of $4.5 billion related to intellectual property rights restructuring as part of the company’s supply chain management efforts. 

Despite the reported loss, Broadcom’s stock has surged 75% over the past year, driven by investor confidence in the company’s role in producing essential components for big data centers and artificial intelligence (AI) infrastructure. Broadcom works with tech giants like Google and Apple, contributing to the development of chips such as Google’s Tensor Processing Unit (TPU), which is used to train AI models. 

Broadcom CEO Hock Tan expressed optimism about the company’s future AI-related growth. Tan stated that Broadcom anticipates $12 billion in sales from AI parts and custom chips in fiscal 2024, an increase from its previous forecast of $11 billion. “Broadcom’s third-quarter results reflect continued strength in our AI semiconductor solutions and VMware,” Tan said. 

In the third quarter, Broadcom’s semiconductor business reported $7.27 billion in sales, marking a 5% year-over-year increase. This segment remains larger than Broadcom’s infrastructure software division, which generated $5.8 billion in revenue, largely boosted by the company’s acquisition of VMware. 

Broadcom’s focus on AI and its strong semiconductor business continues to position the company as a key player in the evolving tech landscape, particularly as demand for AI infrastructure expands. 

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