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Broadcom Inc forecast fourth-quarter revenue above Wall Street expectations on Thursday, betting on strong demand for its semiconductors from the adoption of 5G technology and a shift to hybrid work models.
Broadcom's efforts to diversify revenue by ramping up investments in its software business has insulated the company from being heavily impacted by supply chain disruptions.
The company's wireless business division, which counts Apple Inc as a major customer, also stands to benefit from the latest iPhones expected to be launched this month.
Analysts have indicated that the 5G transition, which is still in its nascent stage, is likely to boost demand for Broadcom's radio frequency and wireless chips that help devices connect to Bluetooth and Wi-Fi.
Broadcom forecast current-quarter revenue of about $7.35 billion, compared with analysts' estimates of $7.23 billion, according to IBES data from Refinitiv.
Revenue rose 16% to $6.78 billion in the third quarter ended Aug. 1, edging past expectations of $6.76 billion.
Chief Executive Officer Hock Tan attributed the performance to demand from cloud, 5G, broadband and wireless segments.
The company also make chips for data centers and servers, which means the rapid migration to cloud and a rebound in enterprise spending will benefit Broadcom in a post-pandemic world as many companies embrace a hybrid model of working.
Excluding items, Broadcom earned $6.96 per share, topping estimates of $6.88.
Reporting by Eva Mathews in Bengaluru; Editing by Amy Caren Daniel.
Sources: Reuters, CNBC Television