Broadcom Stock Drops Amid Weak Revenue Guidance
Broadcom's stock price dropped by 5% on Wednesday due to disappointing revenue guidance for the next fiscal year. Despite beating earnings estimates, Broadcom's shares edged up in extended trading.
The chipmaker reported a significant increase in revenue and net income for the fiscal fourth quarter, with revenue rising 86% to $29.59 billion and net income more than tripling to $13.09 billion. The company attributed this growth to its custom chips designed for artificial intelligence labs, including Google, Meta, and OpenAI.
Broadcom's CEO Hock Tan stated that the company expects to speed up shipments of Google Ironwood tensor processing units to Anthropic and TPU 8i chips to Google. He also mentioned that Broadcom will deliver tens of billions of dollars in processors to Google each year for the next several years.
Tan expressed confidence in Broadcom's growth prospects, predicting that AI revenue would double to $115 billion in fiscal 2027 and again in fiscal 2028 to $230 billion. The company is also targeting over $30 in earnings per share for the 2027 fiscal year.