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Broadcom
stock fell after the chip maker’s solid earnings results failed to satisfy investors.
On Thursday, the semiconductor company reported adjusted earnings per share of $11.06 for the fiscal fourth quarter, topping the Wall Street consensus for $10.96 a share. Revenue came in at $9.3 billion, in line with expectations of $9.3 billion, according to FactSet.
The company said its semiconductor-solutions segment had revenue of $7.3 billion in the quarter, while the infrastructure software segment generated $2.0 billion.
On the call with analysts and investors, CEO Hock Tan said generative AI-related demand is accelerating.
The chip maker’s stock traded down as much as 2.3% to $901.15 shortly after the release Thursday.
Broadcom
also gave guidance for fiscal 2024, projecting revenue of $50 billion, including its recent acquisition of VMware, which was completed last month. The Street consensus for fiscal 2024 was $39.2 billion in revenue, but it is unclear whether VMware was included in those estimates.
Broadcom’s semiconductors are in a number of categories, including networking, broadband, server storage, wireless, and industrial. Some of the company’s chips have exposure to generative artificial intelligence applications, which has been a popular investment theme this year.
Broadcom’s results were “driven by investments in accelerators and network connectivity for AI by hyperscalers,” Tan said in the earnings release.
Broadcom shares are up 65% this year, compared with the 49% rise for the iShares Semiconductor exchange-traded fund (ticker: SOXX), which tracks the performance of the ICE Semiconductor Index.
Write to Tae Kim at tae.kim@barrons.com
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