Broadcom CEO: "Strong demand for AI semiconductors! Non-AI business below expectations, recovery expected in the future [earnings summary]"

●The company once again raised its full-year AI-related revenue forecast. The upward revision exceeded market expectations but failed to push the stock price higher. It is believed that investors are becoming more cautious ahead of the employment statistics on the following day, which also had an impact.
●The company once again upwardly revised its full-year AI-related revenue forecast. The increase exceeded market expectations, but did not push up the stock price. It is believed that investors' cautious attitude, as they await the employment statistics on the following day, also influenced the stock price.

◇ AI business is doing well, non-AI business "bottoming out and recovering in 4Q".
●The management commented during the earnings call,"AI demand remains strong." Reflecting the strong demand for AI semiconductors, the full-year AI-related revenue outlook has been revised upward from $11 billion to $12 billion, surpassing market expectations once again. The magnitude of the upward revision also exceeded market forecasts.
●Considering the positive outlook for AI semiconductors and the lower-than-expected revenue guidance for 4Q, it is expected that the growth of non-AI business will be below market expectations.
●The management explained that the majority of their semiconductor businesses, excluding AI, are either in their worst period or have emerged from it. "In some of these markets, although revenue is significantly lower than the same period last year, it has started growing again compared to the previous quarter. Non-AI related businesses have bottomed out and are expected to recover in the 4th quarter."
●"The growth rate of the AI-related business surpasses other businesses. This is due to strong demand from hyperscalers for both AI networking and custom AI accelerators. We are confident that AI will continue to maintain strong performance next year."

There are mixed evaluations from Wall Street, but positive evaluations are prominent.
After the earnings announcement, Fubon Securities lowered their target stock price, but Morgan Stanley, Goldman Sachs, and JP Morgan raised their target stock prices.

Demand for custom AI semiconductors and AI network products is strong, and AI-related revenue has been expanding steadily over the past two quarters. It is expected to maintain strong performance next year, and Broadcom is becoming a true AI semiconductor stock.

The current earnings report revealed that the non-AI business is dragging down overall performance. The underperformance of the non-AI business is believed to be partly influenced by concerns about the slowdown in the US economy. The company has indicated that although the non-AI business is still somewhat unstable, it is bottoming out overall and is expected to recover in the fourth quarter. If this becomes even more evident in the fourth quarter earnings report, it is expected to help allay investor concerns.

Considering the company's unique position in the AI semiconductor market, it can be said that it is worth paying attention to the AI semiconductor stocks next to NVIDIA. While it is necessary to be aware of the investment environment for semiconductor stocks and the trends in the US economy, it is considered to be an attractive investment opportunity in the medium to long term.