Broadcom (AVGO) stock fell about 3% in after-hours trading on Wednesday despite the company reporting record revenue and operating profit for the second quarter, News.Az reports, citing Yahoo Finance.
The chipmaker posted revenue of $22.19 billion, slightly above analysts’ expectations of $22.13 billion. Earnings per share came in at $2.44, also beating estimates of $2.39.
Broadcom said it expects revenue for the current quarter to reach $29.4 billion, compared with a consensus forecast of $28.61 billion.
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However, its artificial intelligence chip sales outlook for the third quarter weighed on investor sentiment. The company projected AI chip sales of $16 billion, below analysts’ estimates of $17.2 billion.
Semiconductor revenue tied to AI in the second quarter surged 143% year over year, underscoring strong demand, but the softer forward guidance raised concerns.
Shares of the company had rallied strongly in the previous five sessions, reaching all-time highs and adding roughly $300 billion in market value as investors positioned for strong results.
Some market strategists warned that profit-taking could follow even strong earnings and guidance.
Broadcom is expected to benefit from rising hyperscaler spending on artificial intelligence infrastructure, which is projected to reach $650 billion this year. The company’s customers include major tech firms such as Alphabet Inc. and Meta Platforms, as well as AI developers Anthropic and OpenAI.
The broader semiconductor sector has been leading equity markets to record highs this year, driven by an ongoing AI data center boom and global infrastructure expansion.
