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The chipmaker expects roughly $16 billion in AI semiconductor revenue for the third quarter as investors weigh whether its rapid growth can continue.
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Broadcom (NASDAQ:AVGO), the semiconductor and infrastructure-software company, dipped about 0.4% to $368.93 on Tuesday ahead of Wednesday's results, according to GuruFocus. The report is being framed as a stress test for the AI boom and the premium investors are willing to pay for it.
Broadcom's previous quarter set a high bar. Revenue reached $22.19 billion, free cash flow hit $10.26 billion, and AI semiconductor sales surged 143% to $10.8 billion.
Management expects third-quarter revenue of roughly $29.4 billion, with AI chips contributing about $16 billion — around 54.4% of projected revenue, which would make them the company's biggest growth engine. The stock trades 5.33% above its $350.25 GF Value estimate, per GuruFocus, and management aims to grow its custom accelerators and networking portfolio while keeping its 46.2% free-cash-flow margin intact.
Share prices can rise and fall. Past performance does not guarantee future results. This article is news, not investment advice.
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