Broadcom

Arm Holdings shares rose on the chip-design firm’s reported move into making its own semiconductors. The losers from the shift could be Broadcom and Marvell Technology. A move into chipmaking would mark a huge shift for Arm, which built its business on licensing out chip designs. The risk is that Arm could be viewed as a competitor for some of its biggest customers such as Qualcomm and Nvidia. However, Arm-produced chips could instead end up taking some value away from Broadcom and Marvell who help design in-house processors for major technology companies. Arm does most of its business licensing its designs for handsets, but it also has a growing position in high-end cloud-server processors. Its first chip is set to be a central processing unit for large data centers, to run artificial-intelligence applications with Meta Platforms as an initial customer, according to a report from the Financial Times. Rather than […]

Chip makers like Nvidia are far from the only beneficiaries of President Trump’s effort to make the U.S. a leader in artificial intelligence. The Stargate artificial-intelligence project that Trump announced on Tuesday will ultimately require hundreds of thousands of Nvidia processors across its 20 data centers. To work together, those chips will need to be networked. That is why news of the $500 billion project lifted data network stocks like Broadcom, Marvell Technology, and Arista Networks by some 7% Wednesday. Nvidia stock rose 4%. The major share of hardware spending for an AI data center goes for the high-value processors from Nvidia and its rivals. But the number of network devices required rise exponentially with the processor count, so giant data centers like those of Stargate may be spending as much as 20% of their semiconductor dollars on network chips. As Barron’s reported in December, Nvidia dominates the sale of

Broadcom stock has already risen by nearly half this year, but it can trade even higher fueled by growth in revenue related to artificial intelligence, a William Blair analyst says. Broadcom is the market’s second-favorite AI chip play behind Nvidia. Its shares have gained 46% this year given its position as one of the leading players designing chips for companies such as Alphabet’s Google unit and Meta Platforms, which are all-in on building enormous AI data centers. In its latest call to discuss earnings, earlier this month, management said it is targeting $12 billion in AI revenue for the 2024 fiscal year, which ends in October, up from $11 billion earlier. There was no numerical forecast for next year, but the company expects continued “strong growth.” On Wednesday, in a research note, William Blair’s Sebastien Naji wrote that he sees “room for continued steady growth going into fiscal 2025 and

Broadcom’s (AVGO) latest financial results showed that its artificial intelligence growth is not linear, but continues to be “strong,” Morgan Stanley said Friday. Late Thursday, the chipmaker logged stronger-than-expected fiscal third-quarter results, buoyed by demand for AI semiconductor solutions and its VMware acquisition. Broadcom expects full-year AI revenue of $12 billion, up from the previous outlook of more than $11 billion. Morgan Stanley previously estimated $12 billion in AI revenue and noted that Broadcom had characterized its application-specific integrated circuit, or ASIC, business as lumpy from quarter to quarter. “That lumpiness did play out, as the company saw AI processors flattish (quarter on quarter), with networking for AI up slightly,” the brokerage said in a Friday note to clients. “Importantly, growth is still close to 3x this year, and sequential growth resumes in October.” Morgan Stanley said that although it expects that buying at some of the largest users of

Broadcom (AVGO) could see upside to its latest quarterly results and guidance driven by artificial intelligence and VMware, Oppenheimer said Friday. The chipmaker is scheduled to report its fiscal third-quarter results Thursday. Oppenheimer expects earnings of $1.23 a share on sales of roughly $12.88 billion. Analysts polled by Capital IQ are looking for $1.20 and $12.96 billion, respectively. Broadcom’s semiconductor and software businesses are poised for sequential growth for the quarter, with the former likely logging a 7% annual rise, according to Oppenheimer. Within semiconductor, networking growth is likely to be driven by cloud service provider demand for custom AI application-specific integrated circuits, or ASICs, and Ethernet switches. The wireless division is likely to advance sequentially and annually ahead of the upcoming Apple (AAPL) iPhone 16 refresh, the brokerage said in a note to clients. Within wireless, the company’s server and storage business is expected to see an annual decline

Broadcom (AVGO) is a top pick on a shift to a growth stock from a value stock, mostly because of boosts from artificial intelligence and VMWare, BofA Securities said Monday in a report. Compound annual growth in 2024 to 2026 may accelerate to 13% from 5% to 10% normalized in the traditional business from 2017 to 2023, driven by AI silicon and VMWare compound annual growth at 24%, BofA said. Cost savings from VMWare and a strong balance sheet might boost margins to 61%, increasing earnings by 20% annually, the report said. Broadcom’s earnings per share in 2026 may reach $69, while faster sales at 15% to 17% annually with a metric on margins up to 65% to 67% may drive EPS to $80 per share, the report said. “There is also the potential for further mergers and acquisitions next year, as gross leverage remains low” and the company “continues

We up our 12-month target to $1,850 from $1,600 on a P/E of 30x our CY 25 EPS view, above historical rising AI and software exposure. We keep our FY 24 (Oct.) EPS at $49.16 and raise FY 25 to $60.00 from $56.90. AVGO posts Apr-Q EPS of $10.96 vs. $10.32, beating the $10.84 consensus. Sales rose 43% (+12% ex. VMware), with Infrastructure Software +175% and Semiconductor Solutions +6%. AI sales grew 280% ($3.1B in Apr-Q; +$11B now seen in FY 24) and is driving upside, while non-AI semiconductor sales appear to have bottomed out. Networking growth of 44% (53% of semi sales) is being led by momentum for its Ethernet switches (Tomahawk 5/Jericho 3) and higher customer silicon revenue. We think VMware integration is progressing ahead of schedule given sharply lower spending (seen at $1.3B exiting Q4 from $1.6B in Apr-Q/$2.3B in late ’23), streamlining SKUs (from over 8,000

Broadcom’s (AVGO) latest quarterly results and guidance could at least match expectations driven by its “burgeoning” artificial intelligence franchise, Oppenheimer said in a note e-mailed Thursday. The chipmaker is scheduled to report its fiscal second-quarter results June 12. Oppenheimer projects earnings at $11.07 a share on sales of $12.26 billion. The results would mark an increase from the $10.32 and $8.73 billion reported a year earlier, respectively. The brokerage said the quarterly results and outlook for the current three-month period could be in line or better than forecasts. The semiconductor segment’s sales likely grew 5% year over year, with networking jumping 18%, led by custom compute AI application-specific integrated circuit, as well as the Tomahawk and Jericho switches and routers, Oppenheimer said. Broadcom owns the largest custom compute merchant franchise, aided by its relationship with Alphabet’s (GOOG, GOOGL) Google, according to the note. Order velocity is picking up at Google

The rally in Broadcom stock has leveled off as doubts set in about the sustainability of the AI boom for any company not named Nvidia. However, there are still plenty of believers in on Wall Street and analysts at Melius Research are joining the ranks. Broadcom stock is up 65% over the last 12 months, but is also down nearly 6% over the past three months. Its full-year guidance for revenue of $50 billion, which accompanied its first-quarter earnings back in March, didn’t wow the market and its rally stalled. However, with Broadcom’s earnings due on June 12, Melius Research’s Ben Reitzes sees reasons to get on board now, and most have to do with artificial intelligence. “Broadcom is one of the must-own AI stocks due to its leadership as a fabless semiconductor provider across many categories — but its Networking division (30% of revenue) should drive upside with AI

By Emily Bary Broadcom impresses analysts with a recent AI event Broadcom Inc.’s stock is raking in the love from Wall Street analysts Thursday, after the company held an event focused on its opportunity in artificial intelligence. The chip maker’s commentary was enough to earn it a new fan, as TD Cowen’s Matthew Ramsay turned bullish on Broadcom shares (AVGO) in a note to clients that included a header that read: “Better Late Than Never?” Broadcom shares were up 6.5% in afternoon trading Thursday, and they have advanced 114% over the past 12 months. But Ramsay sees more upside ahead stemming from multiple levers. See also: Broadcom earnings spotlight tech’s growing AI ‘dichotomy’ For instance, Ramsay likes that the company is adding a third accelerator customer for its custom-silicon business. “While Broadcom declined to name the specific customer, it did indicate the program was ramping now and would ship in

CFRA, an independent research provider, has provided MT Newswires with the following research alert. Analysts at CFRA have summarized their opinion as follows: We keep our 12-month target at $1,600 based on a P/E of 28.1x our CY 2025 EPS view, above historical to reflect our view of increasing AI opportunities and accelerating VMware growth/cost synergies. AVGO hosted its AI Infrastructure Investor Event yesterday, and we came away more bullish on the growth opportunities tied to AI and AVGO’s custom silicon and networking business. With regards to its custom silicon ASIC business (where Alphabet is its biggest client), AVGO highlighted a potential third customer that could ramp in the coming quarters. We see even more upside in its high-speed Ethernet business, where AVGO pointed out that it is poised to benefit from potentially 1M+ accelerator clusters entering the market, up from 30,000 currently. AI is set to comprise over 35%

TD Cowen analyst Matthew Ramsay upgrades Broadcom from Market Perform to Outperform and raises the price target from $1400 to $1500.