Broadcom exceeded Wall Street’s revenue and earnings expectations for its fiscal third quarter, reporting a notable rise in its stock value over the past year, driven by the company’s critical role in AI infrastructure. Despite a net loss of $1.88 billion for the quarter due to a significant tax provision, Broadcom CEO Hock Tan revealed an optimistic forecast, anticipating $12 billion in sales from AI components and custom chips for fiscal 2024, an increase from the previous $11 billion estimate.
The company reported earnings per share of $1.24, surpassing the $1.20 expected, and revenue of $13.07 billion, beating the $12.97 billion forecast. However, shares dipped 7% in after-hours trading following guidance that met expectations. Broadcom is also predicting current-quarter revenue of $14 billion, aligning with previous estimates.
The company’s net loss reflects a $4.5 billion tax provision related to the internal transfer of intellectual property rights. Broadcom’s stock has surged 75% in the past year as investors recognize its crucial contributions to AI infrastructure, including key components for Google’s TPU chips and Apple’s AI features. The third-quarter semiconductor sales reached $7.27 billion, a 5% increase from the previous year, outpacing the $5.8 billion in infrastructure software revenue, much of which stems from the VMware acquisition.
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