Broadcom Falls as Soft Forecast Overshadows AI Chip Surge, Google Shift Risk

Broadcom shares fell after the US chipmaker issued a revenue forecast that missed Wall Street estimates, overshadowing rapid growth in its artificial intelligence business and fueling concern that competition will intensify as big tech customers diversify suppliers.

Broadcom said on Sept. 2 that revenue for the May-July quarter totaled $29.59 billion, topping the consensus estimate of $29.25 billion. Adjusted earnings per share were $3.32, above Wall Street's $3.21 estimate. AI semiconductors led the growth, with third-quarter AI chip revenue rising to $16.7 billion, more than tripling from a year earlier.

The company's outlook fell short of expectations. Broadcom projected fourth-quarter revenue of $34.8 billion, below Wall Street's forecast of $35.03 billion. The stock closed down 0.66% in regular trading and fell more than 3% in after-hours trading following the earnings release.

Investors are focused on intensifying competition in the custom AI chip market. As big tech companies ramp up spending on AI infrastructure, they are cutting reliance on Nvidia while spreading chip supply across multiple vendors, raising the possibility that Broadcom's market position could come under pressure. Google signed a custom chip supply agreement with Marvell Technology last month. Broadcom is also moving to diversify its supply chain and expand production capacity to reduce reliance on specific customers.

Lee Hye-in, Hankyung.com reporter hey@hankyung.com