Broadcom, the global leading chip design company, released its performance for the third quarter of fiscal year 24. The performance was outstanding, with revenues increasing by 47% year-on-year to $13.072 billion. Non-GAAP diluted EPS increased by 18% year-on-year to $1.24, exceeding market expectations. However, after the company's performance was announced, the stock price fell more than 8% in after-hours trading. The main reason is that the revenue growth of the semiconductor solution in this quarter slowed down more than expected, lower than expectations. At the same time, the company's performance guidance for the fourth quarter is also below expectations, causing market concerns.
So, has Broadcom been wrongly killed by the market? The semiconductor industry has recently performed poorly, is it approaching the top of the cycle? Next, let's start analyzing Broadcom's financial report, uncover the mist, and provide investment advice for investors.
1. Where is Broadcom's future growth driver?
Broadcom's revenue mainly comes from two major parts: semiconductor solutions and infrastructure software business. Among them, the revenue from semiconductor solutions accounts for a large proportion, exceeding 50%, while the scale of the infrastructure software business has rapidly expanded since the acquisition of VMware.
Source: Company Announcement
In this quarter, the company's revenue grew by 47%, mainly benefiting from the 200% growth in infrastructure software business, thanks to the acquisition of VMware. The impact of the acquisition is expected to continue into the next quarter, and subsequent growth will return to normal levels. However, the growth rate of semiconductor solutions revenue slowed to 5% this quarter, mainly due to weak growth in non-AI business, and broadband revenue declined by 49%...