SAN JOSE / LONDON (IT BOLTWISE) – Broadcom, a leading chip supplier to Apple and Google, increased both sales and profit in its fourth fiscal quarter, exceeding analysts’ expectations. Despite these successes, the company disappointed some investors with its forecasts for its AI business, resulting in a significant decline in its stock price.
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Broadcom, a major player in semiconductor technology, recently reported its quarterly results, increasing both sales and profits. However, these positive results were overshadowed by a disappointing reaction from investors who were skeptical about the company’s future prospects in artificial intelligence (AI). The share price fell by over ten percent after the company announced its expectations for the coming year.
In the past quarter, Broadcom was able to increase its adjusted earnings before interest, taxes, depreciation and amortization (Ebitda) by 34 percent to $12.2 billion. Net profit almost doubled to $8.5 billion. These impressive numbers demonstrate the company’s strong position in the market, particularly in the AI space, where Broadcom is benefiting from the increasing demand for AI data centers.
Despite the positive financial results, some investors expressed concerns about the company’s long-term growth prospects. CEO Hock Tan said Broadcom has a $73 billion backlog of AI products scheduled to ship over the next six quarters. However, this figure was seen by some as disappointing as it fell short of expectations.
However, analysts remain optimistic. Experts at Citigroup praised Broadcom’s results and outlook and raised their price target to $480. They emphasized that the AI business could already account for almost a third of group sales in the 2025 financial year. Bank of America also continues to see Broadcom as a “top pick” and increased its price target to $500 as the company’s long-term prospects in the AI space remain promising.
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