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By The Smart Investor  •  October 1, 2024
Three Mondays ago, semiconductor stocks fell in unison after chip designer Broadcom (NYSE: AVGO) disappointed the stock market with its revenue guidance. The rout stretched across all sectors of the industry. Casualties include Taiwanese chip manufacturer Taiwan Semiconductor Manufacturing Company (NYSE: TSM), Japanese equipment makers Advantest (TSE: 6857) and Tokyo Electron (TSE: 8035) along with Korean chip makers SK Hynix (KRX: 000660) and Samsung Electronics (KRX: 005930). What is happening here? That’s the question I got on MoneyFM 89.3 recently — and here’s my answer.

Guidance doesn’t miss estimates, estimates miss guidance 

First, let’s address the hullabaloo over Broadcom’s missed revenue guidance. The US-based firm forecasted US$14 billion in revenue for its fourth quarter ending 3 November 2024 (4Q’FY24). And what are analysts’ estimates? It’s US$14.13 billion. Now, take a moment to look at these two numbers again. We’re talking about a purported miss of less than 1% here. How this tiny difference is worthy of a reaction is beyond me....
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By The Smart Investor
The Smart Investor is co-founded by David Kuo, Joanna Sng, and Chin Hui Leong. The company was formed in late 2019 from the ashes of the Motley Fool Singapore. The Smart Investor believes that everybody can learn how to invest, smartly. We aim to educate people on how to invest smartly by providing investing education, stock commentary and market coverage for Singapore and around the world.
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