Broadcom Inc (NASDAQ:AVGO, ETR:1YD) shares traded lower on Friday despite the chipmaker reporting first quarter earnings that topped Wall Street estimates on the top and bottom lines and reiterating its full-year revenue guidance of $50 billion.
For the first quarter, Broadcom saw its revenue increase 34% over the year-ago quarter to $11.96 billion, beating estimates of $11.72 billion.
Adjusted earnings per share of $10.99 were up from $10.33 in the year-ago quarter and ahead of estimates of $10.25.
It also saw improvements in inventory levels, narrowing its inventory days outstanding from 71 to 38.
“We are pleased to have two strong drivers of revenue growth for Broadcom in the first quarter and fiscal year 2024. First, our acquisition of VMware is accelerating revenue growth in our infrastructure software segment, as customers deploy VMware Cloud Foundation,” commented Broadcom CEO Hock Tan.
“Second, strong demand for our networking products in AI data centers, as well as custom AI accelerators from hyperscalers, are driving growth in our semiconductor segment.”
The company reiterated its full-year guidance of approximately $50 billion in revenue, which represents 40% growth year-over-year, and adjusted earnings before interest, taxes, depreciation and amortization of $30 billion.
CEO Tan said on the company’s earnings call that Broadcom expects $10 billion in revenue related to AI chips this year, with about $7 billion coming from helping two major clients design custom AI chips.
Investors, likely disappointed the company did not raise its full-year guidance, sent shares of Broadcom 4% lower to US$1,353 shortly after the US markets opened on Friday.