Broadcom Reports Strong Q3 Earnings But Stock Falls Due to Weak Guidance
Broadcom (AVGO) reported strong fiscal third-quarter results, with revenue of $29.59 billion and adjusted earnings per share of $3.32 both exceeding expectations. AI semiconductor revenue was a standout at $16.7 billion for the quarter, showing robust growth. However, investors reacted negatively to management's fourth-quarter guidance, which fell slightly below consensus estimates despite CEO Hock Tan’s reassurances about continued strong demand. The stock dropped more than 3% in after-hours trading and has underperformed year-to-date compared to the broader PHLX Semiconductor Index (SOXX). Competitive pressures from companies like Marvell (MRVL) and supply constraints have also contributed to investor concerns. Broadcom’s balance sheet remains healthy, with $24 billion in cash on hand at quarter-end. The market's reaction reflects growing caution around AI-driven growth expectations amid rising Treasury yields impacting high-multiple tech stocks.
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Topics: ai broadcom semiconductors stock_performance