Broadcom Raises Revenue Forecast on AI Chip Demand but Shares Dip

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Broadcom delivered a stronger-than-expected revenue forecast for its third quarter, supported by robust demand for its networking and custom AI computing chips. The company projected Q3 revenue of approximately $15.80 billion, exceeding analysts’ average estimate of $15.71 billion according to LSEG data.

Despite the upbeat forecast, Broadcom’s shares fell 4% in after-hours trading. The stock had already climbed nearly 30% over the past month and around 12% for the year, leading some investors to view the forecast as insufficiently exceeding high market expectations. “Clearly, expectations were high coming into the print,” said Kinngai Chan, senior research analyst at Summit Insights Group.

The Palo Alto-based company plays a crucial role in the AI hardware ecosystem, designing custom processors and networking chips for major AI and cloud computing clients such as OpenAI and Google. Broadcom has begun shipping its newest networking chip, the Tomahawk 6, which doubles the performance of its predecessor and enhances data center efficiency for AI workloads.

Broadcom CEO Hock Tan highlighted the ongoing growth, noting that AI semiconductor revenue is expected to accelerate to $5.1 billion in the third quarter, marking ten consecutive quarters of growth. “Our hyperscale partners continue to invest,” Tan stated. In contrast, non-AI semiconductor revenue remains sluggish and near the bottom of its cycle.

For the second quarter, Broadcom reported total revenue of $15 billion, narrowly surpassing analysts’ estimates of $14.99 billion. Revenue from its semiconductor segment, which includes products for data centers and networking, grew 16.7% year-over-year to $8.41 billion.

Elon Musk Granted Extension to Respond to SEC Lawsuit Over Twitter Stake Disclosure

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Elon Musk has been granted an additional six weeks by the U.S. Securities and Exchange Commission (SEC) to respond to a civil lawsuit alleging that he delayed disclosing his large stake in Twitter in 2022. The new deadline for Musk’s response is now July 18, extended from the original June 6 date.

The SEC and Musk jointly agreed to the extension in a federal court filing in Washington, D.C., describing the delay as “reasonable and in the interest of conserving judicial resources.”

The SEC’s lawsuit claims that Musk’s 11-day delay in revealing his initial 5% ownership in Twitter allowed him to purchase over $500 million worth of additional shares at artificially suppressed prices, disadvantaging other investors. The agency is seeking a civil penalty and the forfeiture of profits Musk allegedly gained unfairly.

Gamers Line Up for Nintendo Switch 2 Amid High Demand on Launch Day

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Enthusiastic gamers queued up on Thursday for the launch of Nintendo’s Switch 2, showcasing strong demand for the next-generation gaming console. The new device, priced at $499.99, features a larger screen and improved graphics while debuting with titles like Mario Kart World.

In Tokyo’s Ikebukuro district, winners of a sales lottery by electronics retailer Bic Camera gathered early to collect their Switch 2 units. Yumi Ohi, a 30-year-old delivery contractor who traveled from nearby Saitama prefecture after missing previous lotteries, expressed her excitement: “I feel like I’m going to cry.”

Since its original launch in 2017, the Nintendo Switch has sold 152 million units and become a cultural phenomenon with hits such as The Legend of Zelda and Animal Crossing: New Horizons. Analyst Piers Harding-Rolls of Ampere Analysis expects the large Switch user base to help drive strong initial adoption for the new model. He added that Nintendo appears better prepared to meet demand this time around.

The launch is also a test for Nintendo’s supply chain amid ongoing U.S.-China trade tensions. Nintendo forecast sales of 15 million Switch 2 units this financial year, alongside 4.5 million of the original Switch.

President Shuntaro Furukawa said the company will boost production and focus on sales promotion to surpass these targets. The Switch 2 sales lottery on Nintendo’s Japanese store drew 2.2 million applicants, while pre-orders at Target in the U.S. sold out in under two hours.

Serkan Toto, founder of Kantan Games, warned buyers they might face weeks or months before the console becomes widely available in stores. Investor enthusiasm is high, with Nintendo shares up 28% year-to-date despite a recent 2% dip.

However, some analysts caution that casual gamers might wait to see how the Switch 2’s game library expands beyond launch titles. Ampere forecasts sales exceeding 100 million units by 2030.

The launch also sparked debate over game pricing, with Mario Kart World priced at $79.99 in the U.S. Longtime gamer Akitomo Takahashi, 40s, considered this reasonable given historical game prices and looks forward to playing Elden Ring on the new console.