This is why Broadcom (AVGO) stock is crashing
The post This is why Broadcom (AVGO) stock is crashing appeared on BitcoinEthereumNews.com.
After holding fairly steady with only a modest 0.84% decline during September 5 trading, Broadcom (NASDAQ: AVGO) stock tumbled 9.38% from its close at $152.82 to its latest recorded price of $138.49. AVGO stock 1-day and after-hours price chart. Source: Google The fall was triggered by the publishing of the semiconductor and infrastructure provider’s latest earnings report – published after the closing bell on September 5 – which, despite beating revenue and earnings-per-share (EPS) forecasts, disappointed investors. Indeed, though revenue came in at $13.07 billion – 0.84% above the expected $12.96 billion – and EPS at $1.24, 2.79% higher than the predicted $1.21, Broadcom posted a net loss of $1.875 billion. The figure was significantly below the $3.3 billion profit reported in the same quarter of the previous year. Additionally, the chipmaker provided disappointing guidance, estimating its fourth-quarter revenue at $14 billion – a 51% year-over-year increase, despite being slightly below the $14.11 forecasted by analysts. The company also anticipates its adjusted EBITDA to be around 64% of this projected revenue. Still, it is worth remembering that the bulk of the disappointing figures in the report come from the continued – but temporary – need to cushion the late 2023 acquisition of VMware, a software company. Furthermore, Broadcom actually upgraded its expectations for the full-year artificial intelligence (AI) revenue from the $11 billion estimated in the previous quarter to the current $12 billion estimate. The sell-off of AVGO shares that followed the report may have been an overreaction once the general outlook for Broadcom is taken into account. Indeed, the chipmaker boasts an overall ‘buy’ rating on the stock analysis platform TradingView at press time on September 6. Additionally, out of the 46 experts represented, 30 consider Broadcom stock a ‘strong buy,’ 8 rate it as a ‘buy,’ and 8…
Filed under: News - @ September 6, 2024 9:22 am