Broadcom’s stock price has fallen 12% following its strong fiscal first-quarter results, despite a boost in its AI revenue outlook for fiscal 2024. The company’s total revenue increased 34% in the first quarter, driven by the acquisition of VMware. The growth was primarily driven by the semiconductor solutions sector, with AI revenue quadrupling year-over-year to $2.3 billion.
Networking revenue also saw significant growth, with Broadcom’s custom AI accelerators in high demand from hyperscaler customers. The company is also expanding its product offerings in the AI space, with expectations for networking revenue to grow by 35% in fiscal 2024. AI revenue is anticipated to account for 35% of total semiconductor revenue by then, with AI accelerators making up 70% of that revenue.
Analysts have raised their price targets for Broadcom, citing the strength of the company’s AI business. Broadcom recently expanded its optical interconnect solutions for AI and machine learning applications, introducing new technologies like the 200 Gbps per lane EML and VCSEL. These technologies are crucial for enabling high-speed interconnects in AI systems.
Additionally, Broadcom has launched Bailly, the industry’s first 51.2 Tbps optical Ethernet switch, which promises lower power consumption and improved efficiency compared to existing solutions. The company will be hosting an investor meeting titled Broadcom Enabling AI in Infrastructure on March 20. Charlie Kawwas, president of the Semiconductor Solutions Group, will lead the discussion on Broadcom’s commercial silicon portfolio.
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https://www.forbes.com/sites/robertdefrancesco/2024/03/17/broadcom-shares-retreat-despite-raised-ai-revenue-forecast/
