Broadcom's Stock Takes a Hit Despite Strong Earnings

Published 5 hours agoAVGO

Broadcom's Stock Takes a Hit Despite Strong Earnings

Broadcom recently reported impressive first-quarter financial results, yet the company's stock saw a significant decline. Shares dropped by 10%, closing at $1,235 after previously reaching a record high of $1,438.17 on March 4, according to a Forbes report.

The tech giant's revenue surged by 34% compared to the previous year, reaching $11.96 billion and outpacing analyst predictions of $11.72 billion. Additionally, Broadcom achieved adjusted earnings per share (EPS) of $10.99, which exceeded consensus estimates of $10.40. AI-related revenue notably expanded, quadrupling to $2.3 billion and comprising 31% of the total semiconductor revenue.

Despite these achievements, Broadcom encountered challenges in its non-AI segments, with a 9% decline in non-AI semiconductor revenue, primarily linked to seasonal weaknesses in the wireless market. Furthermore, the company maintained its annual revenue forecast at $50 billion, which was below some investor expectations for an increase. Reuters also noted that the stock decline coincided with broader market trends, affected partly by a softer-than-anticipated August jobs report.

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