8 months ago
Broadcom Stock Drops Amid AI Concerns
Broadcom is a company that makes chips for computers.
They recently announced their earnings for the last three months of 2024, which were better than what experts thought they would be.
They also said they expect to make even more money in the next three months.
However, after they announced this, their stock price went down by 8.4%.
This is because investors were not as excited as they hoped about the big orders they have for AI chips and because the company didn't say how much money they think they'll make from AI in 2026.
The company's CEO said they have a lot more orders coming, but they don't know exactly how much money that will be yet.
Even though their stock went down a little after the announcement, it has gone up a lot so far this year.
The S&P 500 and the Nasdaq indices also fell on Friday as artificial intelligence stocks came under pressure after Broadcom’s weak sales forecast fueled concerns about an AI bubble.
Broadcom reported Q4 2024 revenue of $18.02 billion, beating estimates of $17.49 billion.
The company's EPS was $1.95, higher than the estimated $1.86.
Broadcom projected Q1 2025 revenue of $19.1 billion, a 28% increase from the previous year.
The stock fell as much as 8.4% in extended trading due to investor disappointment with the AI order backlog and lack of long-term AI revenue guidance.
CEO Hock Tan mentioned that AI chip sales will double in Q1 2025 compared to the same period last year.
- Who
- Broadcom Inc., a chip manufacturing company
- What
- Reported Q4 earnings and guidance that beat estimates, but stock fell 8.4% post-market
- Where
- Palo Alto, California
- When
- After market hours on Thursday
- Why
- Investors were unimpressed with the AI order backlog and lack of long-term AI revenue guidance
Key facts
- Revenue (Q4 2024)
- $18.02 billion
- EPS (Q4 2024)
- $1.95
- Projected Q1 2025 Revenue
- $19.1 billion
- AI Order Backlog
- $73 billion
- Anthropic Order (Q4 2024)
- $11 billion
- Stock Decline (Post-Market)
- 8.4%
- Year-to-Date Stock Rise (2025)
- 75%
Quotes
Hock Tan
Chief Executive Officer of Broadcom Inc.
“We do expect much more as more orders come in for shipments within that next six quarters. So our lead time, depending on the particular product it is, can be anywhere from six months to a year.”
livemint.com
“It’s a moving target. It’s hard for me to pinpoint what ’26 is going to look like precisely. So I’d rather not give you guys any guidance.”
livemint.com
