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Broadcom Inc. (AVGO), headquartered in Palo Alto, California, designs, develops, and supplies a broad range of semiconductor, enterprise software, and security solutions. Valued at $705.82 billion by market cap, the company’s product portfolio services critical markets, including cloud, data center, networking, broadband, wireless, storage, industrial, and enterprise software. The technology leader is expected to announce its fiscal third-quarter earnings for 2024 on Thursday, Aug. 29.
Ahead of the event, analysts expect AVGO to report a profit of $0.95 per share on a diluted basis, unchanged from the year-ago quarter. The company beat the consensus estimates in three of the last four quarters while missing on one other occasion.
For fiscal 2024, analysts expect AVGO to report EPS of $3.74, down 3.1% from $3.86 in fiscal 2023.
AVGO stock has outperformed the S&P 500’s ($SPX) 14.5% gains on a YTD basis, with shares up 37.3% during this period. Similarly, it outshined the S&P 500 Technology Sector SPDR’s (XLK) 13.3% gains over the same time frame.
AVGO’s overall performance can be attributed to the surge in artificial intelligence (AI) demand, as evidenced by its 280% year-over-year rise in AI-related revenue during Q2. AI software applications require high-performance hardware to function optimally, thus boosting the demand for new-generation chips. Investors’ optimism in AVGO is mainly due to its significant opportunities in data center virtualization software, networking chips for data center switches and routers, and application-specific integrated circuits (ASICs) for artificial intelligence.
On Jul. 24, AVGO shares fell nearly 7% after tech giants Alphabet Inc. (GOOGL) and Tesla, Inc. (TSLA) recently reported results failed to live up to investors’ expectations. The softer-than-expected results led investors to believe that these tech giants' AI investments might not be paying off yet and may not continue at these levels.
On Jun. 13, AVGO shares closed up more than 12% after the company reported its Q2 results. Its adjusted net revenue of $12.49 billion beat the consensus estimates of $12.06 billion. The company forecasted full-year revenue of $51 billion, which was above the analyst estimates of $50.58 billion. Meanwhile, its adjusted EPS was $10.96, higher than analyst expectations of $10.79.
Analysts’ consensus opinion on AVGO stock is bullish, with a “Strong Buy” rating overall. Out of 32 analysts covering the stock, 29 advise a “Strong Buy” rating, and three recommend a “Hold.” The average analyst price target for AVGO is $190.51, indicating a 25.6% potential upside from the current levels.
On the date of publication, Dipanjan Banchur did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
