Broadcom shares plunge as software sales lag, AI chip forecast steady
Broadcom reported accelerating AI chip growth, but software sales lagged expectations and the full-year AI chip forecast was left unchanged. Shares fell sharply in after-hours trade. Investors questioned whether the unchanged guidance signals a slowdown in hyperscaler capital spending.
CNBC Top NewsBroadcom reported fiscal second-quarter results. The company said revenue from artificial-intelligence chips accelerated sequentially, while sales in its software segment fell short of consensus expectations. Shares dropped notably in extended trading after the report.
Management kept its full-year AI chip revenue forecast unchanged, maintaining prior guidance. Analysts said the lack of an upward revision fed investor concern that hyperscaler cloud providers may be moderating the pace of capital spending. Chief executive Hock Tan reiterated that demand for AI products in the quarter remained strong.
Broadcom's print is closely watched as a sector bellwether for the AI infrastructure investment cycle. Other chip stocks traded mixed after the release; rival Nvidia slipped marginally, while AMD opened flat. Investors will watch whether the software business stabilises in the following quarter and whether the AI chip guide is revised in subsequent updates.
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