Jun 13, 2024

Broadcom releases earnings after the market closes on Wednesday after opening at a new all-time high. 


AVGO – Daily Chart 

AVGO was set to open on Wednesday at $1,487, and positive earnings can be seen in the stock vault above $1,500. The $1,437 level will be the support in the future. 

Broadcom is the latest semiconductor company to report earnings with its second-quarter financial results. Analysts are confident that the company can continue to see substantial gains with revenue of $12.03 billion, which would considerably improve from $8.73 billion a year ago. 

Analysts also expect the company to report earnings per share of $10.84 compared to $10.32 last year. The company has beaten estimates for earnings per share in 10 straight quarters. 

Investors will be looking for continued growth for the latest quarter and progress in AI partnerships. Shares of the California-based chip company have soared 30% already this year. 

Analysts at Citi expect Broadcom to increase 2024 AI revenue from $10 billion to over $11 billion. 

“We expect their AI revenues to continue to grow as they benefit from Ethernet’s deployment in AI data centres, Google’s continued TPU ramp, and the ramp of two new ASIC customers,” Morgan Stanley wrote. 

However, the current price surge means that there can be no disappointment in earnings or growth. 

“We are pleased to have two strong drivers of revenue growth for Broadcom in the first quarter and fiscal year 2024. First, our acquisition of VMware is accelerating revenue growth in our infrastructure software segment, as customers deploy VMware Cloud Foundation,” Broadcom CEO Hock Tan said after the first quarter. “Second, strong demand for our networking products in AI data centres, as well as custom AI accelerators from hyperscalers, are driving growth in our semiconductor segment.” 

Another critical piece of data will be management’s guidance, previously set at $50 billion for 2024. The recent price run suggests that investors expect a lift to that figure, which would give the company further gains. 

There are no signs of a slowdown in the semiconductor sector. The SOXX ETF, which tracks a collection of chip companies, has gained 40% this year, primarily driven by Nvidia.

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