.September 6, 2024 12:47 PM

Shares of Broadcom (NASDAQ:AVGO) fell over 9% today as the chipmaker’s fourth-quarter revenue forecast of $14 billion missed expectations by a slight margin. The company reported adjusted earnings per share of $1.24 on revenue of $13.07 billion for Q3, beating analyst estimates.

Broadcom’s broadband division saw a 49% revenue drop in Q3 due to a slowdown in spending from telecommunications and service providers. CEO Hock Tan expects broadband sales to remain down over 40% year-over-year in Q4, with recovery anticipated in 2025.

Despite broadband challenges, Broadcom’s AI-optimized chips saw strong demand, leading to a raised full-year sales outlook for AI components to $12 billion. Q3 AI revenue was around $3.1 billion, meeting expectations.

While no specific guidance was given for AI revenue in fiscal 2025, Broadcom anticipates continued strong demand for AI products.