(Reuters) -Chipmaker Broadcom forecast fourth-quarter revenue slightly below Wall Street expectations on Thursday, hurt by sluggish spending in its broadband segment.
Despite a sharp rise in orders for its artificial intelligence chips, shares fell nearly 5% in extended trading.
The Irvine, California-based company expects revenue of around $14 billion, while analysts polled by LSEG expected $14.04 billion.
Investor expectations for artificial intelligence-linked companies remain very high as they bet on AI chips and technology to drive significant growth.
Broadcom reported third-quarter revenue of $13.07 billion, beating estimates of $12.97 billion, according to LSEG data.
However, the company posted a loss of $1.88 billion on a GAAP basis, compared with a profit of $3.30 billion a year ago.
The net loss includes a one-time discrete non-cash tax provision of $4.5 billion, resulting from an intra-group transfer of certain intellectual property rights to the United States as part of a supply chain realignment.
The company raised its forecast for annual AI revenue to $12 billion, up from its earlier expectation of $11 billion, as it benefits from strong demand for its custom chips.
Broadcom’s custom chips, which are used to move around large quantities of data, have seen increased orders from companies looking to streamline their data operations.
The company’s revenue in the third quarter for its semiconductor solutions segment, which houses its networking and custom chips, came in at $7.27 billion, while analysts expected $7.39 billion.
AI-chip leader Nvidia’s quarterly forecast fell short of sky-high investor expectations last week, failing to maintain its history of comfortably beating Wall Street targets.
(Reporting by Zaheer Kachwala in Bengaluru; Editing by Tasim Zahid)
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