US Stock Market Observation: Analyzing the stock price fluctuation risk this year from Broadcom's 2024 GAAP key financial report.

Broadcom announced its impressive 2024 financial performance, with President and CEO Hock Tan stating that the successful integration of VMware contributed to a 44% rise in revenue for the company in 2024, reaching nearly $51.6 billion. Revenue from semiconductor solutions and infrastructure drove this growth. With the promotion of AI XPUs and ETH network products, artificial intelligence revenue also increased by 220%, reaching a record $30.1 billion.

In April of this year, Broadcom announced a partnership with Google Cloud to further confirm that it will transfer VMware workloads to Google and use Google Cloud to build a more secure cloud infrastructure, integrating generative AI to enhance Symantec Enterprise Cloud, and resist network attacks and data exposure. The collaboration between Broadcom and Google will strengthen product development and sales strategies, providing seamless integrated deployment solutions for mutual customers.

According to Broadcom's GAAP Net Revenue for the 2024 fiscal year, it can be seen that it has increased from $35.819 billion to $51.574 billion, as mentioned by Chen Fuyang, indicating a rise in the situation. However, despite the positive predictions from various parties, the 3D chart I created shows a significant decrease in Net Income, dropping from $14.082 billion in 2023 to $5.895 billion in 2024. Diluted earnings per share also decreased from $3.30 to $1.23.

The following is the author's personal analysis, and investors can look at the future development of Broadcom and summarize the following key points.

Net income growth VS Net profit decline

The significant growth in net income indicates the continuous expansion of Broadcom's products and business. The active growth in net income may be a sign of strong market demand, and if this trend continues, it may have a positive impact on the stock price. According to the financial report, the semiconductor solution product revenue in Broadcom's net income for 2024 is $30.096 billion, and the infrastructure software revenue is $21.478 billion, bringing Broadcom's net income to a total of $51.574 billion, demonstrating strong bullish demand for core products such as ASIC custom AI chips.

However, even so, the overall net profit did not increase with the net income. Instead, it decreased significantly, indicating that costs and expenses, along with business expansion and other financial pressures such as continuous investment in research and development or the acquisition of VMware, would burn up relative funds and cash flow.

Investors usually seek sustained profits, so these expenses that bring development but must be paid first must be closely monitored.

Overall optimism in the AI chip market can drive stock prices up

This year, the overall market and economic development of artificial intelligence continue to rise, which will play an important role in driving investor sentiment. If Broadcom's technology investment and acquisitions can develop more innovative products, it may support or even drive up stock prices.

The impact of US tariff trade policies on geopolitical economy

Under the leadership of Trump, the US tariff trade policy and regulatory laws may change at any time, especially tariff sanctions are most likely to affect stock price fluctuations. Broadcom's customized chips and cloud technology are crucial for large enterprises, internally protecting confidential company documents and employee information, and externally reducing data exposure and hacker attacks. Although there are rumors that Broadcom will collaborate with Meta and Apple, the official website of Broadcom only confirms the collaboration with Google. The current financial report shows that Broadcom's development in the field of artificial intelligence is still burning money. If Broadcom can properly use cash flow and strategically control expenses, it can address investors' concerns about the decline in net profit. Pure academic observation, not investment advice, DYOR.

This article US stock observation: The analysis of Broadcom's 2024 GAAP key financial report on this year's stock price fluctuation risk first appeared in the Chain News ABMedia.