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Broadcom Inc (Nasdaq: AVGO) is trading down in extended hours on Thursday even though it reported market-beating financial results for its first quarter on continued AI demand.

Broadcom stock down on muted guidance

The stock is taking a hit primarily because investors are not entirely content with the future guidance. AVGO reiterated its guidance for $50 billion in revenue in fiscal 2024.

Analysts, in comparison, were at $49.8 billion. Hock Tan – the chief executive of Broadcom Inc said in a press release today:

 

Our acquisition of VMware is accelerating revenue growth in our infrastructure software segment, as customers deploy VMware Cloud Foundation.

The multinational also announced $5.25 a share of quarterly cash dividend on Thursday. Broadcom stock is now up roughly 35% versus its year-to-date low.

Broadcom Q1 earnings snapshot

• Earned $1.33 billion versus the year-ago $3.77 billion
• Per-share earnings also declined from $8.80 to $2.84
• Adjusted EPS printed at $10.99 as per the earnings report
• Revenue climbed 34% year-over-year to $11.96 billion
• Consensus was $10.42 a share on $11.72 billion in revenue

Broadcom saw its semiconductor solutions revenue pop 4.0% in Q1 while infrastructure software revenue went up a whopping 153%. CEO Tan also said on Thursday:

Strong demand for our networking products in AI data centers, as well as custom AI accelerators from hyperscalers, are driving growth in our semiconductor segment.

Earlier this week, AVGO unveiled the world’s first 5-nanometre PCIe solutions.

Advancing AI: We asked Jas Tremblay, GM of @Broadcom’s Data Center Solution Group, what he's most excited for this year. pic.twitter.com/hJUU4VSF2E

— AMD (@AMD) March 6, 2024