"Broadcom Inc., a chip company vying with Nvidia Corp. for AI computing revenue, fell by the most in eight months after its sales outlook for the red-hot market failed to meet investors' lofty expectations. The shares slid as much as 8.3% after markets opened in New York Friday, their biggest intraday drop since April 10, following unsettling commentary from Chief Executive Officer Hock Tan the day before on a conference call with analysts."
"He said the company has a backlog of $73 billion in AI product orders that will be shipped over the next six quarters a number that disappointed some investors. But Tan sought to clarify that the figure was a minimum. We do expect much more as more orders come in for shipments within that next six quarters, he said. So our lead time, depending on the particular product it is, can be anywhere from six months to a year."
"Though Tan said that the company received an $11 billion order from AI startup Anthropic PBC in the fourth quarter, he warned that total margins were narrowing because of AI product sales. Broadcom also held off on giving an annual AI revenue forecast, with Tan saying it was a moving target. It's hard for me to pinpoint what '26 is going to look like precisely, he said. So I'd rather not give you guys any guidance."
Broadcom reported a $73 billion backlog of AI product orders slated for shipment over the next six quarters and described that figure as a minimum. Lead times vary by product from six months to a year. An $11 billion order from AI startup Anthropic was received in the fourth quarter. Management withheld an annual AI revenue forecast for 2026, calling it a moving target. Total margins were reported to be narrowing due to AI product sales. Shares fell as much as 8.3% in New York, the biggest intraday drop since April 10. Fiscal first-quarter sales are projected at about $19.1 billion, and the quarterly dividend was raised 10% to $0.65.
Read at www.mercurynews.com
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