Broadcom tumbles on weaker‑than‑expected AI chip guidance

(Sharecast News) - Chipmaker Broadcom tumbled in after‑hours trading on Wednesday after it delivered a mixed set of quarterly numbers and issued an AI sales outlook that fell short of market hopes. Broadcom posted revenue of $22.19bn for the quarter, a touch ahead of the $22.13bn expected, while earnings per share came in at $2.44 against forecasts of $2.39.

However, market participants had been looking for a stronger top‑line beat given the scale of recent AI‑related demand, leaving some investors underwhelmed by the modest outperformance.

Broadcom forecast revenues of $29.4bn for the current quarter, above the $28.61bn consensus, but its guidance on AI chips also disappointed the market, with semiconductor revenues tied to artificial intelligence surging 143% year‑on‑year in the second quarter, but third‑quarter AI chip sales projections of $16bn coming in well below the $17.2bn analysts had pencilled in.

Sentiment was also further dented by Broadcom's decision not to lift its AI semiconductor revenue forecast for 2026, a move the market had been anticipating given the sector's rapid growth.

"We expect this momentum to continue into fiscal year 2027 and reiterate our AI semiconductor revenue guidance to be in excess of $100bn," added chief executive Hock Tan.

As of 1000 BST, Broadcom shares had sunk 13.78% in extended trading to $413.21 each.







Reporting by Iain Gilbert at Sharecast.com