JPMorgan Sees Upside In Broadcom Ahead Of Earnings: Q3 Revenue Could Top $16 Billion On AI Strength

Broadcom Inc AVGO is scheduled to report its fiscal second-quarter results on Thursday, June 5.

The company is likely to report its quarterly results in line with slightly higher than consensus estimates, according to JPMorgan.

The Broadcom Analyst: Analyst Harlan Sur maintained an Overweight rating and price target of $250.

The Broadcom Thesis: The company's healthy results are likely to be driven by continued strong demand for its AI products, stabilization in the non-AI semi business and the unlocking of revenue synergy from the VMware VMW acquisition, Sur said in the note.

Check out other analyst stock ratings.

Backed by a higher revenue base set in the fiscal second quarter, Broadcom is likely to guide to third-quarter revenue closer to $16.1 billion, above the current Street estimates and representing 5%-7% sequential growth, he added.

Broadcom's revenue growth is likely to be led by AI demand strength, with AI revenues exceeding $5 billion, higher than consensus of $4.8 billion, the analyst stated.

"Broadcom remains our overall top pick in our semiconductor coverage given their exposure to AI infrastructure spending trends combined with their diversified end market exposure and best-in-class gross, operation and free cash flow margins," he further wrote.

AVGO Price Action: Shares of Broadcom had risen by 2.25% to $254.30 at the time of publication on Tuesday.

Read More:  
• Broadcom Shares Rise On New AI Tools To Help Businesses Cut Cloud Costs

Photo: Shutterstock