Broadcom loses more than $300bn in market value as revenue forecast disappoints

{"text":[[{"start":11,"text":"Broadcom shed more than $300bn in market value on Wednesday, putting it on course for one of the largest single-day wipeouts, as the chip giant delivered AI revenue guidance that fell short of investors’ highest expectations."}],[{"start":25.1,"text":"Shares fell as much as 15.4 per cent in after-hours trading on Wednesday as the US chip company gave guidance of $29.4bn in revenue for the current quarter, above consensus estimates of $28.2bn, according to Visible Alpha, but short of the highest estimates. "}],[{"start":43.900000000000006,"text":"“The AI revenue guidance came in a bit light,” said Melissa Otto, head of research at Visible Alpha. “I suspect this was the catalyst to take shares lower after hours.”"}],[{"start":54.550000000000004,"text":"The massive haircut for the big player in the AI infrastructure boom comes after a substantial run-up for chip stocks over recent weeks that had pushed Broadcom’s share price to a record closing high of $481.57 on Monday and a market capitalisation of more than $2.3tn."}],[{"start":72.10000000000001,"text":"If the company’s loss holds at Thursday’s closing bell, it would equate to a drop of about $349bn in market value, ranking as the third-biggest wipeout on record for a US company, according to FT analysis."}],[{"start":null,"text":"

"}],[{"start":86.60000000000001,"text":"Broadcom’s shares had risen more than 14 per cent over the past week and recovered sharply from a slump towards the end of March. Its gains have formed part of a historic rally in US semiconductor stocks."}],[{"start":98.85000000000001,"text":"The Philadelphia Semiconductor Index, which tracks 30 of the world’s biggest US-listed chip manufacturers, has gained more than $5tn in market value over the past two months. Investors have piled into the companies that are selling AI infrastructure on hopes of a sustained spending spree over the next two years."}],[{"start":118.60000000000001,"text":"The fall in Broadcom’s stock pointed to the disappointment on the part of investors who have hoped for repeated upwards revisions in Broadcom’s longer-term outlook. Broadcom chief executive Hock Tan had said in March that he expected well over $100bn in AI chip revenue in 2027, and reiterated the same figure on Wednesday."}],[{"start":139.3,"text":"“After a significant move upward supported by a growing sentiment for custom AI chips, Broadcom for all intents and purposes delivered another great quarter,” said Daniel Newman, chief executive of market intelligence firm The Futurum Group. “However, clearly this was a case of running it up into earnings and selling the news.”"}],[{"start":157.65,"text":"“Investors likely wanted to hear Hock Tan suggest that his $100bn of AI chips in 2027 had grown into something meaningfully larger,” Newman added."}],[{"start":167.9,"text":"Broadcom — which sells both hardware and software — reported chip revenue of $15bn for the second quarter, only slightly above the $14.8bn analysts expected, according to Visible Alpha. Its total revenue for the second quarter was in line with consensus forecasts of $22.2bn."}],[{"start":187.3,"text":"Broadcom has emerged as a significant player in the booming AI infrastructure market, competing with Nvidia and AMD to offer the advanced semiconductors needed to train and run AI models. It has announced a growing list of customers for its custom AI chips over the past year, among them Google, Meta, OpenAI and Anthropic. "}],[{"start":209.35000000000002,"text":"But there are questions over whether Big Tech companies can continue their spending splurge. Google this week issued a record equity raising of $85bn to help fund its gargantuan infrastructure plans — its first stock offering in more than two decades and the largest in history."}],[{"start":236.00000000000003,"text":""}]],"url":"https://audio.ftcn.net.cn/album/a_1780537679_7306.mp3"}