Updated 1 min read
What happened: Broadcom (AVGO) stock declined 6% in after-hours trading on Wednesday despite posting record revenue and operating profit in its fiscal second quarter.
By the numbers: The chipmaker reported revenue of $22.19 billion, beating expectations of $22.13 billion. Earnings per share came in at $2.44, topping estimates of $2.39.
However, Broadcom’s third quarter revenue outlook and AI chip sales forecast disappointed the Street. The company said it expects revenue for the current quarter to come in at $29.4 billion, compared with a consensus estimate of $28.61 billion.
Semiconductor revenue from artificial intelligence in the second quarter grew 143% year over year. However, AI chip sales for the third quarter were projected at $16 billion, below analysts’ estimates of $17.2 billion.
What else you should know: Shares of the chipmaker have been on a tear over the past five sessions, hitting all-time highs and adding $300 billion in valuation as investors priced in solid results.
Some strategists warned ahead of the results that even with strong performance and guidance, profit-taking could occur.
Semiconductor stocks have led the broader market rally to all-time highs this year amid an AI data center boom and infrastructure build-out.
Broadcom is expected to benefit from hyperscaler artificial intelligence spending this year, which is estimated to reach $650 billion. The custom chipmaker’s customers include Google (GOOG, GOOGL), Meta (META), and AI developers Anthropic (ANTH.PVT) and OpenAI (OPAI.PVT).
Ines Ferre is a senior business reporter for Yahoo Finance. Follow her on X at @ines_ferre.
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