Broadcom shares fall post earnings

Summary

Kristina Partsinevelos reports on Broadcom's quarterly earnings results. Shares fell ~15% despite strong revenue and AI guidance, as the market expected higher numbers and a raised long-term target. Competition concerns also weighed, with Google partnering with MediaTek on custom chips. Analysts offered mixed views including buying the pullback and expecting a pause.

• Broadcom shares dropped about 15% after earnings despite strong numbers.
• AI chip revenue guidance of $16B for Q3 was up over 200% YoY but below street expectations.
• CEO Hock Tan reiterated the fiscal 2027 AI revenue target of $100B, not raising it as some buy-side hoped for $150B.
• Google's partnership with MediaTek on inference chips raised competition concerns for Broadcom.
• Gross margins guided down to 74% on product mix, though still high.
• Analysts from Mizuho recommend buying the pullback, while Bernstein expects shares to pause.
• Wells Fargo flagged positive read-throughs to Marvell and Intel from Broadcom's loss.