(Reuters) – Broadcom forecast fourth-quarter revenue below Wall Street estimates on Thursday, on worries bleak enterprise spending and stiff competition in the networking chip space will outweigh benefits from a boom in artificial intelligence-led demand.
Shares of the San Jose, California-based company fell 2.7% in extended trading.
Soft enterprise demand, coupled with slower-than-expected recovery in consumer electronics markets such as smartphones, has also taken a toll on Broadcom’s semiconductor business.
The entire software industry is feeling the pain of slashed IT budgets across enterprises, both in the U.S. and Europe. Broadcom’s software portfolio has also been impacted by the same.
Even as the company has introduced new networking products to suit AI workloads, competition is rising from Nvidia’s alternative to ethernet chips, InfiniBand and companies like Marvell Technology.
The chip company expects current-quarter revenue to be about $9.27 billion. Analysts on average expect revenue to be $9.28 billion, according to Refinitiv data.
Revenue in the third quarter was $8.88 billion. Analysts polled by Refinitiv expected revenue of $8.86 billion.
(Reporting by Chavi Mehta in Bengaluru; Editing by Krishna Chandra Eluri)
