Earnings Report Preview | Strong Demand for AI Chips, Broadcom Expected to Achieve Double Growth in Q2
Broadcom is expected to announce its second-quarter results on Thursday, with analysts predicting revenue of $15.02 billion, a year-on-year increase of 20%, and adjusted net profit of $7.8 billion. Demand for artificial intelligence chips is strong, with AI business revenue expected to grow by 42% year-on-year. Oppenheimer analysts raised the target price from $225 to $265, with all 13 analysts giving a "buy" rating. Broadcom's stock price rose by 2.74%, closing at $248.71, with a year-to-date increase of 7.6%
According to the Zhitong Finance APP, Broadcom (AVGO.US) will announce its second-quarter earnings after the U.S. stock market closes on Thursday. The market expects strong demand for artificial intelligence (AI) chips to drive the company's revenue and profit growth. Analysts expect Broadcom's Q2 revenue to be $15.02 billion, a year-on-year increase of 20%; adjusted net profit is expected to be $7.8 billion, up from $5.39 billion in the same period last year. Revenue from AI business is expected to grow by 42% year-on-year and 7% quarter-on-quarter, reaching $4.42 billion.
Oppenheimer analysts released a report stating that Broadcom is "the second-largest AI franchisee after Nvidia," raising its target price from $225 to $265. Analysts noted that Broadcom's "core business in networking, wireless, broadband, server/storage, and software support underpins sustainable growth. We maintain a long-term buy stance."
Among the 14 analysts tracked by VisibleAlpha, 13 rated Broadcom stock as "buy" or equivalent, with only 1 giving a "hold" rating. The average target price set by analysts is approximately $247.
Last Wednesday, Nvidia released a strong sales report, helping the chip manufacturer briefly reclaim the title of the world's most valuable company. Morgan Stanley analysts subsequently stated, "We are also optimistic about Broadcom's performance in the AI sector, but it is becoming increasingly difficult to generate more enthusiasm."
As of Monday's U.S. stock market close, Broadcom rose 2.74% to $248.71. The stock has increased by 7.6% year-to-date
