Broadcom stock sinks
Broadcom (AVGO) stock fell ~8.5% after markets closed yesterday following the semiconductor giant’s fiscal 2019 second-quarter earnings release. It missed analysts’ revenue estimate and cut its fiscal 2019 (ending in October) revenue guidance by $2 billion to $22.5 billion due to sluggishness in its semiconductor solutions business.
Choppy demand for chips driven by US-China trade tensions weakened Broadcom’s revenue, as did the US government’s ban on Huawei Technologies. The company generated ~$900 million (4% of its overall sales) from Huawei last year.
Chip stocks fall on Broadcom’s forecast
Broadcom’s forecast of a demand slowdown pulled down chip stocks. Qorvo, Skyworks Solutions, Texas Instruments, NVIDIA, Micron Technology, Qualcomm, NXP Semiconductors, Advanced Micro Devices, and Marvell Technology fell 5.23%, 3.29%, 2.15%, 2.12%, 2.49%, 1.79%, 2.48%, 2.96%, and 2.27%, respectively, after market hours yesterday.
Broadcom stock closed 0.67% higher yesterday at $281.61. The stock has risen 11.74% this year, underperforming the S&P 500, NASDAQ Composite, and Dow Jones Industrial Average, which have risen 15.35%, 18.11%, and 11.91%, respectively.