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Broadcom (AVGO) is a tech company focused on designing and developing semiconductor and infrastructure software solutions with uses for data centers, networking, broadband, and cybersecurity, among other things.
Valued at a whopping $1.1 trillion by market capitalization, the company is headquartered in San Jose, California. Over this past year, AVGO has more than doubled in value, gaining 113% over the past 52 weeks. In just the last month, shares gained nearly 40%.
AVGO set a new 52-week high on Dec. 16 of $251.88, although shares have since returned to the $230 level.
Broadcom’s Conflict with Netflix
Broadcom’s subsidiary VMware has been attacked by streaming giant Netflix (NFLX), which is accusing the subsidiary of patent infringement related to its virtual machine operations. According to reports, Netflix alleges VMware’s vSphere program violates patents it holds regarding virtual machines. Netflix has filed its case in the U.S. District Court for the Northern District of California.
The dispute is a part of a bigger legal issue between Broadcom and Netflix which started in 2018 and is due for trial in mid-2025 in the U.S.
Broadcom Announces Fourth-Quarter Results
Broadcom reported its fourth-quarter results on Dec. 12. The company posted a profit of $4.32 billion, which translated to an adjusted profit of $1.42 per share. This came in higher than analysts’ $1.39-per-share estimates. On the revenue side, it saw a rise of 51.2% year-over-year to $14.05 billion, falling just short of Wall Street’s $14.06 billion estimate.
The company’s operating margin slipped from 45.6% reported in the same quarter last year to 32.9% reported this year. Adjusted EBITDA increased 37% during the quarter to a record $31.9 billion, while free cash flow stood strong at $21.9 billion. Broadcom ended the quarter with a cash reserve of $9.35 billion. The company also hiked its quarterly dividend by 11% to $0.59 per share.
Management estimates revenue of $14.6 billion for the ongoing first quarter of its fiscal 2025, with an adjusted EBITDA that represents 66% of projected revenue.
Analyst Ratings on AVGO Stock
Broadcom is much loved by analysts and has a “Strong Buy” rating with a mean price target of $242.24, reflecting upside potential of 4.42% from the market rate.
The stock is well covered by 33 analysts with 30 “Strong Buy” ratings and 3 “Hold” ratings.
