Broadcom Stock Sinks After Results Show Profit Pressures

Broadcom stock fell more than 11% to end last week after the company’s quarterly results raised investor concerns about the profitability of its AI business, Laura Bratton reported for Yahoo Finance.

The forecast also marked a decline from 77.9% in the fourth quarter and 78.3% in the third quarter, though the margins remain extremely high. (Photo: Broadcom X)

The company reported results that topped Wall Street forecasts. The top Google chip supplier said orders from leading AI developer Anthropic surged to $21 billion.

Despite that growth, Friday’s decline wiped more than $200 billion off Broadcom’s market capitalization after the company guided for a gross margin of 76.9% for the current quarter, down from 79% in the year-ago period.

The forecast also marked a decline from 77.9% in the fourth quarter and 78.3% in the third quarter, though the margins remain extremely high.

Meanwhile, the company’s AI chip sales soared 74% year over year to $6.4 billion, exceeding the $6.2 billion projected by Wall Street analysts tracked by Bloomberg. Overall revenue climbed nearly 30% to $18 billion, above the $17.5 billion expected, and earnings per share rose to $1.95 from $1.42.