Broadcom reported earnings per share of $2.44, slightly above the $2.40 estimate, but its revenue of $22.19 billion fell short of the $22.27 billion expected by analysts.
Despite a substantial year-over-year revenue increase of 48% from $15 billion, the stock declined in after-hours trading, particularly after CEO Hock Tan did not adjust the company's ambitious target of $100 billion in AI chip sales by 2026. The company anticipates revenue of approximately $29.4 billion for the next quarter, exceeding the $28.53 billion forecast by Wall Street.
Broadcom's net income rose to $9.31 billion, or $1.91 per share, an 88% increase from the previous year. The company has seen strong demand for its custom AI chips, particularly from major clients like Google and Anthropic, which has contributed to a nearly 40% rise in its stock this year.
However, the unchanged forecast for AI semiconductor sales has led to investor skepticism, especially given that AI revenue more than doubled to $10.8 billion in the second quarter. Tan expressed confidence in continued growth, projecting AI revenue to triple in the current quarter to $16 billion.
Additionally, while semiconductor solutions revenue was robust at $15.1 billion, infrastructure software revenue of $7.18 billion fell short of expectations, further impacting investor sentiment