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....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.