Broadcom Stock Poised for Growth: AI Demand and VMware Acquisition Fuel Optimism

Citi - Broadcom stock poised for upside as AI and VMware fuel earnings By Investing.com

On Friday, Broadcom Limited (NASDAQ:AVGO) maintained its Buy rating and $175.00 price target from a major financial firm. The endorsement follows the company's reported earnings, which surpassed consensus expectations. This performance was attributed to the robustness of its artificial intelligence (AI) business and contributions from VMware (NYSE:VMW). Despite this, the company anticipates a decrease in gross margin for the fourth fiscal quarter of 2024 due to the expansion of its AI accelerator business, which is expected to account for 18% of fiscal year 2024 estimated sales. The financial firm expects Broadcom's margins to improve in fiscal year 2025, driven by the accretive impact of VMware, which is projected to make up 25% of fiscal year 2024 estimated sales. The firm's stance is buoyed by the potential for Broadcom to exceed consensus forecasts, bolstered by the strength of its AI sector and the earnings per share (EPS) accretion anticipated from VMware. Broadcom's recent earnings announcement highlighted the success of its AI division, alongside the contributions from its VMware operations. These factors have been pivotal in the company's financial performance, leading to results that have outstripped analyst expectations. The financial firm's analysis suggests that while Broadcom is facing margin pressures in the near term, the long-term outlook appears positive. The anticipated increase in margins is linked to the full integration and financial benefits of VMware within Broadcom's business model. Broadcom's stock continues to be viewed favorably by the financial firm, which has reiterated its Buy rating. This outlook is based on the company's strong performance in the AI market and the expected positive financial impact from its acquisition of VMware. The firm's price target of $175.00 remains unchanged, reflecting confidence in Broadcom's growth trajectory. In other recent news, Broadcom Inc. has reported a series of significant developments. The company announced a significant increase in its fiscal 2024 forecast for artificial intelligence (AI) revenue to $12 billion, driven by a surge in demand for its custom chips and networking equipment. Despite reporting a net loss of $1.88 billion for the quarter, largely due to a one-time non-cash tax provision, Broadcom's third-quarter revenue surpassed expectations at $13.07 billion. Broadcom also reported robust third-quarter revenue growth of 47% to $13.1 billion, with a positive outlook for the fourth quarter. Wells Fargo (NYSE:WFC) has maintained an Equal Weight rating on Broadcom shares, anticipating an increase in the company's fiscal year 2024 AI semiconductor revenue target to over $12 billion. In addition, Broadcom introduced VMware Tanzu Platform 10 and Tanzu AI Solutions, aimed at simplifying cloud-native application development. The company also launched a new initiative called Catalyst to enhance its Accelerate Program by engaging elite Enterprise Security Group partners. Broadcom's recent developments have been met with various responses from analyst firms, including Cantor Fitzgerald, Oppenheimer, TD Cowen, and Evercore ISI, who have adjusted their price targets for the company's shares. These recent developments highlight Broadcom's ongoing market position and growth trajectory. Recent data from InvestingPro underscores the financial firm's confidence in Broadcom Limited (NASDAQ:AVGO). With a market capitalization of $711.36 billion and a robust revenue growth of 32.04% in the last twelve months as of Q3 2024, Broadcom's financial health appears strong. The company's significant gross profit margin of 74.71% during the same period showcases its ability to maintain profitability despite market challenges. InvestingPro Tips highlight Broadcom's consistent dividend growth, having raised its dividend for 14 consecutive years, which signals a strong commitment to shareholder returns. Additionally, analysts remain optimistic about the company's sales growth in the current year, further reinforcing the positive outlook presented by the financial firm. The company's performance is also reflected in its high return over the last year, with a year-to-date price total return of 37.92% as of the provided data date. For investors seeking more detailed analysis and additional insights, InvestingPro offers a comprehensive list of tips, with a total of 14 additional tips available for Broadcom, which can be accessed for further investment consideration.

Broadcom reiterates stock target, overweight rating with solid F3Q results By Investing.com

On Friday, Broadcom Limited (NASDAQ:AVGO) shares received a reaffirmation of its Overweight rating and a steady $210.00 price target from KeyBanc Capital Markets. The semiconductor and infrastructure software solutions company reported robust fiscal third-quarter results and provided forecasts for the fourth quarter that aligned with expectations. This comes as the company transitions back to quarterly guidance following the substantial completion of integrating VMware (NYSE:VMW) Inc. Broadcom's recent performance was bolstered by a significant 350% year-over-year increase in AI accelerator sales, driven by Google (NASDAQ:GOOGL)'s Tensor Processing Unit (TPU) and new shipments to two other estimated clients, potentially ByteDance and Meta Platforms (NASDAQ:META). Moreover, the company experienced a 17% quarter-over-quarter growth in non-AI networking and saw Enterprise Networking/Storage bookings improve. The strength in Broadcom's software segment was evident as VMware showcased robustness with an Annualized Booking (NASDAQ:BKNG) Value (ABV) reaching $2.5 billion, a 32% increase from the previous quarter. This growth helped to counterbalance the weaker performance from Brocade, a data and storage networking products provider. KeyBanc noted the encouraging results and has made adjustments to their estimates, maintaining their positive outlook on Broadcom. The firm emphasized the solid quarterly performance and the company's ability to meet its guidance, signaling confidence in Broadcom's market position and business strategy. In other recent news, Broadcom Inc. has reported a significant increase in its financial performance for the third quarter of fiscal year 2024, with consolidated net revenue reaching $13.1 billion, marking a 47% rise year-over-year. The company's operating profit also saw a substantial boost, climbing 44% year-over-year, attributed to robust AI revenue and increased bookings from VMware. Looking ahead, Broadcom raised its revenue outlook for fiscal 2024 to $51.5 billion and anticipates adjusted EBITDA to hit 61.5%. On the other hand, Broadcom experienced a drop in its stock price due to a lukewarm revenue forecast. Despite raising the forecast for AI chip sales by $1 billion for the fiscal year, reaching a total of $12 billion, the adjustment failed to excite investors. CFRA Research and Morgan Stanley (NYSE:MS) analysts noted that while the company's AI chip business remains a promising area, its growth could be inconsistent as it relies on a small number of clients making significant capital investments. These developments reflect a strong performance in the AI sector and a promising outlook for Broadcom's semiconductor and software divisions. The company's strategic financial management, including debt restructuring and dividend payouts, showcases a commitment to maintaining a healthy balance sheet while delivering value to shareholders. The emphasis on AI and the collaboration with Seagate indicate Broadcom's focus on innovation and market trends. Broadcom Limited's (NASDAQ:AVGO) strong fiscal quarter is reflected in its robust real-time financial metrics. The company boasts a significant market capitalization of $645.91 billion, underscoring its heavyweight status in the industry. With a high P/E ratio of 122.91, investors are showing their willingness to pay a premium for the company's earnings, which may be justified by its impressive revenue growth of 32.04% over the last twelve months as of Q3 2024. This growth trajectory is further highlighted by a quarterly revenue increase of 47.27% in Q3 2024. An InvestingPro Tip worth noting is that Broadcom has raised its dividend for 14 consecutive years, demonstrating a commitment to returning value to shareholders. Moreover, analysts anticipate sales growth in the current year, reinforcing the positive outlook depicted in the KeyBanc report. For investors seeking more comprehensive analysis, InvestingPro offers a total of 14 additional tips on Broadcom, providing a deeper dive into the company's performance and future prospects. Visit https://www.investing.com/pro/AVGO for a full list of insights and tips. The company's strong financial health is also evident in its gross profit margin of 74.71%, which speaks to its efficiency and pricing power. With such robust fundamentals, Broadcom's market position and strategic moves, as outlined in the KeyBanc report, are well-supported by the data.

JPMorgan sees upside in Broadcom stock as AI demand surges By Investing.com

On Friday, JPMorgan (NYSE:JPM) increased its price target for Broadcom Limited (NASDAQ:AVGO) to $210 from the previous $200, while maintaining an Overweight rating on the stock. The firm's decision comes after Broadcom reported improved results for the July quarter, driven by growth in its artificial intelligence (AI) semiconductor segment, which saw a 3-4% quarter-over-quarter increase. Additionally, the beginning of a cyclical recovery in server/storage and traditional networking segments, coupled with a robust VMware (NYSE:VMW) business, contributed to the positive outcome, despite weaker trends in broadband and industrial. The growth dynamics are anticipated to further accelerate in the October quarter, with AI semiconductors expected to rise by 10% quarter-over-quarter and non-AI semiconductors by the same margin. VMware's business is projected to grow over 25% quarter-over-quarter. Broadcom has resumed providing quarterly guidance, indicating an October quarter revenue forecast in line with consensus estimates. The guidance suggests an increased revenue outlook for fiscal year 2024 to $51.5 billion, up from the previous forecast of $51 billion. Broadcom's AI revenue, which includes ASICs, networking, and PCIe, grew in the July quarter to $3.2 billion and is expected to see further acceleration in the October quarter. The company has increased its fiscal year 2024 AI revenue outlook to $12 billion, a threefold increase year-over-year, with potential for even higher growth rates in the coming years. The firm has noted that bookings for the cyclical (non-AI) semiconductor businesses have increased by over 20% year-over-year for two consecutive quarters. With 6-12 month order lead times, revenues are expected to start reflecting positive growth in the next six months. In the infrastructure software segment, Broadcom is making significant strides with VMware, achieving high software renewal rates and conversion/upsell to its VCF full stack solution. Revenue in this segment grew 41% quarter-over-quarter and is on track to surpass the quarterly target of $4 billion, with potential to reach $4.5-$5 billion per quarter by 2025. JPMorgan has updated its forward estimates and set a December 2025 price target of $210, reiterating the Overweight rating. Broadcom remains JPMorgan's top pick in the semiconductor sector, with expected stable revenue growth even amidst macroeconomic volatility, attributed to the company's diverse portfolio and product cycles. In other recent news, Broadcom Inc. has reported robust financial performance, particularly in its artificial intelligence (AI) segment. The company's third-quarter revenue surpassed expectations at $13.07 billion, with a significant increase in its fiscal 2024 forecast for AI revenue to $12 billion. Despite a net loss of $1.88 billion for the quarter, largely due to a one-time non-cash tax provision, Broadcom's revenue growth of 47% to $13.1 billion and positive outlook for the fourth quarter indicate a strong financial position. Broadcom's advancements in software, particularly its progress with VMware, were noted by Piper Sandler, which maintains an Overweight rating on the company's stock. Similarly, a major financial firm maintained its Buy rating on Broadcom, attributing the company's strong performance to its AI business and contributions from VMware. Broadcom also introduced VMware Tanzu Platform 10 and Tanzu AI Solutions, aimed at simplifying cloud-native application development. The company has launched a new initiative called Catalyst to enhance its Accelerate Program by engaging elite Enterprise Security Group partners. These recent developments underscore Broadcom's strategic focus and growth trajectory in the technology sector. As Broadcom Limited (NASDAQ:AVGO) continues to show promising growth, particularly in its AI semiconductor segment, it's important to consider the company's financial health and market performance. According to InvestingPro data, Broadcom boasts a robust market capitalization of $711.36 billion, illustrating the company's substantial presence in the market. The revenue growth over the last twelve months, as of Q3 2024, stands at an impressive 32.04%, signaling strong sales performance. Moreover, the company's gross profit margin during the same period is a healthy 74.71%, indicating efficient cost management relative to its revenue. InvestingPro Tips highlight that Broadcom has not only raised its dividend for 14 consecutive years but also maintained these payments for 15 consecutive years. This consistency in rewarding shareholders is a testament to the company's financial stability and commitment to returning value to its investors. Additionally, analysts anticipate sales growth in the current year, which aligns with the positive outlook presented by JPMorgan and the company's own guidance. For investors seeking more in-depth analysis, there are over 10 additional InvestingPro Tips available, offering insights into Broadcom's valuation multiples, profitability, and historical returns. These tips can be accessed through InvestingPro's dedicated page for Broadcom at https://www.investing.com/pro/AVGO, providing a comprehensive overview of the company's financial standing and market potential.

Piper Sandler reiterates Overweight rating on Broadcom stock, sees upside from AI and software growth By Investing.com

On Friday, Broadcom Limited (NASDAQ:AVGO) received a steady vote of confidence from Piper Sandler, maintaining an Overweight rating and a $200.00 price target on the stock. The semiconductor company's recent financial results met market expectations, showing robust performance, particularly in its artificial intelligence (AI) segment. The firm highlighted that Broadcom's AI revenue guidance for the next quarter was raised by $1 billion, reaching a total of $12 billion. The company's non-AI semiconductor revenue also showed signs of recovery, with bookings increasing by approximately 20% sequentially, suggesting that the previous quarter might have been the lowest point for this segment. Additionally, Broadcom's advancements in software, specifically its progress with VMware (NYSE:VMW), were noted. The company is expected to grow revenues while simultaneously reducing operating expenses and increasing leverage. Broadcom has historically achieved around 70% or slightly higher operating margins for its software businesses. Piper Sandler anticipates that VMware will align with this trend by next year. The firm's reiteration of the Overweight rating reflects their continued confidence in Broadcom's strategic positioning and execution across its various business units. In other recent news, Broadcom Inc. has reported a series of significant developments. The company surpassed consensus expectations with robust earnings, largely attributed to its strong artificial intelligence (AI) business and contributions from VMware. Despite anticipating a decrease in gross margin for the fourth fiscal quarter of 2024 due to the expansion of its AI accelerator business, a major financial firm maintained its Buy rating and $175.00 price target for the company. Broadcom's recent earnings announcement highlighted the success of its AI division and the contributions from its VMware operations. These factors have been pivotal in the company's financial performance, leading to results that have outstripped analyst expectations. The company also announced a significant increase in its fiscal 2024 forecast for artificial intelligence (AI) revenue to $12 billion, driven by a surge in demand for its custom chips and networking equipment. Broadcom also reported robust third-quarter revenue growth of 47% to $13.1 billion, with a positive outlook for the fourth quarter. The company introduced VMware Tanzu Platform 10 and Tanzu AI Solutions, aimed at simplifying cloud-native application development. Furthermore, Broadcom launched a new initiative called Catalyst to enhance its Accelerate Program by engaging elite Enterprise Security Group partners. Broadcom's recent developments have been met with various responses from analyst firms, including Cantor Fitzgerald, Oppenheimer, TD Cowen, and Evercore ISI, who have adjusted their price targets for the company's shares. Broadcom Limited (NASDAQ:AVGO) stands out in the semiconductor industry not only for its strategic positioning but also for its financial robustness, as highlighted by recent data from InvestingPro. With a market capitalization of $711.36 billion, Broadcom's size is a testament to its industry prominence. The company's revenue growth has been impressive, with a 32.04% increase over the last twelve months as of Q3 2024, indicating a strong market demand for its products. InvestingPro Tips suggest that Broadcom has a track record of rewarding shareholders, having raised its dividend for 14 consecutive years, a sign of financial stability and commitment to returning value. Additionally, analysts anticipate sales growth in the current year, reinforcing the positive outlook presented by Piper Sandler. For those seeking more in-depth analysis, InvestingPro offers additional tips on Broadcom, providing a comprehensive view of the company's financial health and market position. With a high earnings multiple and robust returns over the past year, Broadcom's financial metrics underscore its strength in a competitive industry. Investors may also find the InvestingPro Fair Value estimate of $137.58 to be a useful point of reference when considering the stock's current price and future prospects. As of the last trading session, the stock closed at $152.82, hovering near the fair value estimate, which could suggest a balanced risk-reward profile at present levels. For more insights and tips on Broadcom, readers can explore the full list of 14 additional InvestingPro Tips available at https://www.investing.com/pro/AVGO.

Bernstein stays confident on Broadcom shares, maintains Outperform amid positive outlook By Investing.com

On Friday, Bernstein SocGen Group maintained its positive outlook on Broadcom Limited (NASDAQ:AVGO), reiterating its Outperform rating and a $195.00 price target for the company's stock. The firm's analysis indicates that Broadcom's non-AI semiconductor businesses seem to have reached a turning point, with some beginning to show growth again. The company has experienced a significant increase in orders, growing at a rate of over 20% for the past few quarters. The analyst noted that the current order growth suggests a potential recovery over the next two to four quarters, which could position the company for a stronger performance next year. The AI segment of Broadcom's business, in particular, was highlighted for its high demand and the anticipation of robust growth in the upcoming year. Broadcom's recent performance in its VMware (NYSE:VMW) operations was also a point of emphasis, as it notably exceeded expectations during the quarter. The analyst expressed confidence in VMware's potential for continued growth. Based on these observations, Bernstein SocGen Group has raised its estimates for Broadcom while maintaining the $195 price target and Outperform rating. The firm's analysis suggests that Broadcom's valuation is becoming increasingly attractive, especially after a recent pullback in the stock's price. The analyst concluded by stating that the company's financial numbers are likely to continue improving, supporting the maintained price target and rating. In other recent news, Broadcom Limited has reported robust growth in its artificial intelligence (AI) segment, leading to an increased fiscal 2024 AI revenue forecast of $12 billion. This growth is primarily driven by a surge in demand for Broadcom's custom chips and networking equipment. Despite a net loss of $1.88 billion due to a one-time non-cash tax provision, the company's third-quarter revenue surpassed expectations at $13.07 billion, marking a significant year-over-year revenue increase of 47% to $13.1 billion. Broadcom's VMWare bookings are gaining momentum, with a $4 billion revenue target for the upcoming quarter, exceeding previous management expectations for FY25. Analyst firms such as JPMorgan (NYSE:JPM), Piper Sandler, and Cantor Fitzgerald have expressed confidence in Broadcom's strategic positioning, with JPMorgan increasing its price target from $200 to $210, and both Piper Sandler and Cantor Fitzgerald maintaining a $200 target. Broadcom has also made significant strides in software, particularly with VMware, achieving high software renewal rates and conversion/upsell to its VCF full stack solution. The company introduced VMware Tanzu Platform 10 and Tanzu AI Solutions, aimed at simplifying cloud-native application development, and launched a new initiative called Catalyst to enhance its Accelerate Program by engaging elite Enterprise Security Group partners. Continuing the positive outlook on Broadcom Limited (NASDAQ:AVGO), real-time data from InvestingPro aligns with Bernstein SocGen Group's analysis. Broadcom's market capitalization stands robust at $711.36 billion, reflecting the company's significant presence in the industry. Additionally, the company's revenue has grown impressively, with a 32.04% increase over the last twelve months as of Q3 2024. This growth trajectory is further evidenced by a substantial quarterly revenue growth of 47.27% in Q3 2024. InvestingPro Tips highlight Broadcom's commitment to shareholder returns, with the company raising its dividend for 14 consecutive years and maintaining dividend payments for 15 consecutive years. This consistency is a testament to the firm's stability and reliability for investors seeking income alongside growth. Furthermore, analysts anticipate sales growth in the current year, which aligns with the high demand and growth potential noted in Bernstein SocGen Group's analysis, particularly in the AI segment. For investors looking for more in-depth analysis, InvestingPro offers additional tips that delve into Broadcom's financial health and market performance. There are 14 more InvestingPro Tips available, providing a comprehensive view of the company's valuation multiples, profitability, and analysts' predictions for profitability this year. These insights can be accessed by visiting: https://www.investing.com/pro/AVGO.

Broadcom shares backed by Overweight rating, Cantor Fitzgerald points to robust earnings potential through CY26 By Investing.com

On Friday, Broadcom Limited (NASDAQ:AVGO) maintained its Overweight rating and $200.00 price target from Cantor Fitzgerald, despite a slight revenue forecast miss for the upcoming October quarter. The semiconductor company's updated full-year 2024 (FY24) revenue outlook of $51.5 billion fell short of the anticipated $51.75 billion or more. However, the October quarter guidance of $14.0 billion was just below the consensus of $14.1 billion and the previously estimated $14.2 billion. The report provided reasons for optimism, highlighting the robust growth in AI revenues, with Accelerators and Ethernet AI sales up 350% and 400% year-over-year, respectively. The expansion of customer base in custom silicon, with names like META (NASDAQ:META) and Bytedance, and the correlation of Ethernet Networking growth with future GPU sales suggest a strong FY25 for AI, potentially exceeding 40% growth. Non-AI semiconductor revenues appear to have stabilized, with an implied increase of about 12% quarter-over-quarter into October, despite being 32% below their previous peak. The company also noted that non-AI orders had grown over 20% year-over-year, which could signal a recovery in the next 6-12 months. While these segments contributed to the slight shortfall in the October quarter guidance, there is an anticipation of future growth that could drive both top-line growth and gross margin improvements in semiconductors. Broadcom's VMWare bookings are gaining momentum, with a $4 billion revenue target for the October quarter, surpassing previous management expectations for FY25. This acceleration is expected to continue into FY25. Cantor Fitzgerald's analysis suggests that Broadcom's shares, trading at $142 after-hours, are undervalued, with potential for a rise in consensus estimates into calendar year 2025 (CY25). The firm envisions a clear path to an annualized earnings per share (EPS) run-rate exceeding $7 by the end of CY25 and surpassing $8 into CY26. Despite the market's current demand for perfection, the firm views the stock as a top pick and recommends buying on weakness, reiterating its $200 price target. In other recent news, Broadcom Limited has been the center of several noteworthy developments. The company's recent financial results indicate a strong performance in the artificial intelligence (AI) segment, with JPMorgan (NYSE:JPM) increasing its price target from $200 to $210, and Piper Sandler maintaining a $200 target. This is primarily driven by a surge in demand for Broadcom's custom chips and networking equipment, leading to an increased fiscal 2024 AI revenue forecast of $12 billion. Broadcom's third-quarter revenue surpassed expectations at $13.07 billion, despite a net loss of $1.88 billion due to a one-time non-cash tax provision. The company also reported a significant year-over-year revenue increase of 47% to $13.1 billion in the third quarter, including contributions from VMware (NYSE:VMW), and provided an optimistic revenue guidance for the fourth quarter. Analyst firms such as JPMorgan, Piper Sandler, and a major financial firm have expressed confidence in Broadcom's strategic positioning and execution across its various business units. The company's diverse portfolio and product cycles are expected to support stable revenue growth, even amidst macroeconomic volatility. In light of Broadcom Limited's (NASDAQ:AVGO) recent revenue forecast and Cantor Fitzgerald's continued optimism, it's pertinent to consider key financial metrics and expert insights. According to InvestingPro data, Broadcom's market cap stands at a formidable $711.36 billion. The company's P/E ratio is currently high at 65.11, reflecting a premium valuation in the market, which aligns with the firm's status as a prominent player in the semiconductors industry. This is further evidenced by a significant revenue growth of 32.04% over the last twelve months as of Q3 2024, showcasing the company's ability to expand its financials robustly. InvestingPro Tips indicate that Broadcom has consistently rewarded shareholders, raising its dividend for 14 consecutive years and maintaining dividend payments for 15 consecutive years, which could be a testament to the company's financial stability and commitment to returning value to investors. Analysts also anticipate sales growth in the current year, suggesting a positive outlook for the company's revenue trajectory. For investors seeking more comprehensive analysis, InvestingPro offers additional tips on Broadcom, providing a deeper dive into the company's financial health and future prospects. These insights and data points underscore the potential for Broadcom's future growth and its position as a solid investment, as suggested by Cantor Fitzgerald's analysis and price target. With a well-established track record of performance and a promising outlook, Broadcom appears poised to continue its upward trajectory in the semiconductor space.

Morgan Stanley reaffirms Overweight on Broadcom shares, points to robust AI growth By Investing.com

On Friday, Morgan Stanley (NYSE:MS) maintained its Overweight rating on Broadcom Limited (NASDAQ:AVGO) and increased the price target to $180 from the previous $176. The firm's analysis indicates that while Broadcom's artificial intelligence (AI) growth is not linear, it remains robust. Despite the company's guidance a quarter ago, which suggested $11 billion in AI revenue for the fiscal year 2024 with no expected sequential growth in the third and fourth quarters, Morgan Stanley had projected a more optimistic $12 billion. Broadcom's recent performance has confirmed the anticipated variability, showing that AI processor sales were relatively flat quarter-over-quarter. However, there was a slight uptick in the networking segment related to AI. This variability was expected, as the company had previously described its ASIC business as being uneven across different quarters. The report highlighted that Broadcom's growth in the AI sector is still on track to nearly triple this year. Additionally, the firm anticipates that sequential growth will pick up again starting in October. Despite the fluctuations in quarterly revenues, the overall trend for Broadcom's AI business points to substantial growth. Morgan Stanley's revised price target reflects confidence in Broadcom's AI business trajectory. The new target represents a modest increase but is part of a continuous positive outlook from the analyst firm on the semiconductor company's financial prospects related to its AI technology offerings. In other recent news, Broadcom Limited has posted impressive financial results, with a significant emphasis on its artificial intelligence (AI) segment. Mizuho and Bernstein SocGen Group have reaffirmed their Outperform ratings, citing potential growth in AI revenue, which is expected to triple year-over-year to more than $12 billion in fiscal year 2024. Furthermore, Cantor Fitzgerald has maintained its Overweight rating, pointing to robust earnings potential through 2026, and JPMorgan (NYSE:JPM) has increased its price target from $200 to $210, citing an upside in Broadcom's stock as AI demand surges. Broadcom's third-quarter revenue exceeded expectations at $13.07 billion, marking a significant year-over-year revenue increase of 47% to $13.1 billion. Piper Sandler has reiterated its Overweight rating on Broadcom, highlighting the upside from AI and software growth. The firm expects the company to grow revenues while simultaneously reducing operating expenses and increasing leverage. Broadcom's VMware (NYSE:VMW) bookings are gaining momentum, with a $4 billion revenue target for the upcoming quarter, exceeding previous management expectations. Analyst firms such as JPMorgan, Piper Sandler, and Cantor Fitzgerald have expressed confidence in Broadcom's strategic positioning, with JPMorgan increasing its price target from $200 to $210. Broadcom has also made significant strides in software, specifically with VMware, achieving high software renewal rates and conversion/upsell to its VCF full stack solution. In light of Morgan Stanley's optimistic outlook on Broadcom Limited (NASDAQ:AVGO), current data from InvestingPro shows a company with a robust financial profile. Broadcom's market capitalization stands at a hefty $711.36 billion, underlining its significant presence in the market. The company's revenue growth has been impressive, with a 32.04% increase over the last twelve months as of Q3 2024, suggesting a strong demand for its products and services. InvestingPro Tips highlight that Broadcom has a history of rewarding its shareholders, having raised its dividend for 14 consecutive years, which aligns with Morgan Stanley's positive assessment. Analysts also anticipate sales growth in the current year, which could be a driving factor behind the firm's increased price target. Additionally, with a substantial return of 78.28% over the past year, investors have enjoyed significant gains. For investors looking for more insights, there are additional InvestingPro Tips available at https://www.investing.com/pro/AVGO, which delve deeper into Broadcom's financial health and market position.

Broadcom AI Franchise Could Provide Upside In 2025: Analyst - Broadcom (NASDAQ:AVGO)

Analysts see near-term concerns with a strong long-term outlook. Analysts see long-term strength for Broadcom Inc AVGO after the company reported quarterly financial results. The Broadcom Analysts: Bank of America analyst Vivek Arya reiterated a Buy rating with a $215 price target. KeyBanc analyst John Vinh maintained an Overweight rating with a $210 price target. Cantor Fitzgerald analyst C.J. Muse reiterated an Overweight rating with a $200 price target. Benchmark analyst Cody Acree reiterated an Overweight rating with a $200 price target. Goldman Sachs analyst Toshiya Hari reiterated a Buy rating and raised the price target from $185 to $190. Check out other analyst stock ratings. Bank of America: The company has a "high-quality AI franchise" that could provide multiple "upside levers" in fiscal 2025, Arya said in a new investor note. Called a top compute pick by the analyst, Broadcom has increased its outlook for AI, showed solid VMWare sales and progress on gross margins. "Overall we continue to see AVGO as a high-quality tale of transformation, from a mid-single digit growth to a mid-teens growth company driven by shift to growthier AI and VMWare segments, with potential for legacy recovery," Arya said. VMWare's growth is now powered by subscription conversions with 70% of bookings subscription-based, up from 30% at the time Broadcom acquired the company in November 2023. KeyBanc: AI and VMWare strength helped offset other Broadcom segment weakness in the quarter, Vinh said. "In semis, AVGO saw strength in AI accelerators, which grew +350% y/y given contributions not only from Google's TPU but also shipments to 2 additional customers (est ByteDance/META)," Vinh said. Broadcom is positioned for "above-industry growth," the analyst added. "We believe Broadcom's strong track record of successful acquisitions will provide a meaningful diversification opportunity and LT growth stability given that the smartphone market continues to saturate at the high end." Cantor Fitzgerald: While the AI outlook was raised, guidance was disappointing for Muse. "While Broadcom raised its AI revenue outlook as expected for all of FY24 (to $12B from $11B), management only raised its FY24 revenue outlook to $51.5B resulting in a modest miss for the October Q guide," Muse said. Investors should be encouraged by Broadcom's report with strong AI revenue growth and improvements for other business segments, with the latter being a future catalyst. "We believe it is only a matter of time before these businesses push higher driving another leg of topline growth as well as accretion to Semiconductor gross margins," Muse added. Benchmark: The earnings report didn't show clear upside but was solid, Acree said in a new investor note. "Following a week of incredibly poor performance in Nvidia's stock price and most AI related names, Broadcom's report was being looked to as some sort of savior of the AI momentum trade, with investors hoping that a strong upside and guide would renew investor confidence in the group," Acree said. Investors got a small beat and guidance that was shy of consensus estimates, the analyst said. "Its AI business lacked the clear upside momentum the Street was looking for." Acree said the company's AI business showed "steady progress." The analyst was impressed by the company's VMWare business and the stabilization of non-AI semiconductor revenue in the quarter. Broadcom displayed "many points of fundamental strength for investors to be encouraged by," Acree added. Goldman Sachs: The company's AI Semiconductor business could be a "near-term hiccup," Hari writes. The long-term thesis on the stock centers on a strong position in high-speed networking, strong margins, consistent free-cash-flow generation and a willingness to return capital to shareholders. "In the near-term, post this quarter's hiccup, we envision a re-acceleration in the AI semiconductor business coupled with a cyclical recovery in the non-AI revenue stream putting the company back on a beat and raise cadence," Hari said. AVGO Price Action: Broadcom shares are down about 9.4% to $138.49 on Friday versus a 52-week trading range of $79.51 to $185.16. Broadcom stock is up 26% year-to-date in 2024. Now Read: Treasury Yields Plunge, TLT ETF Tops $100, VIX Spikes As 50-Basis-Point Rate Cut Odds Soar In Response To Jobs Data Image: Shutterstock Market News and Data brought to you by Benzinga APIs

Broadcom Analyst Lifts AI Revenue Forecast To $12B On Potential Strong Demand From Google, Meta - Broadcom (NASDAQ:AVGO)

VMware boosts infrastructure software revenue 41% Q/Q, adding to Broadcom's growth. Broadcom Inc. AVGO is riding high on the wave of strong momentum in its AI semiconductor segment and VMware business. The company reported an earnings and revenue beat for the third quarter on Thursday. Earnings per share of $1.24 beat estimates by 3.33%. Reported revenue at $13.07 billion delivered a 0.86% surprise on estimates. Despite the earnings beat, Broadcom shares have been trading lower since the report came out. The stock dipped as much as 9.4% in premarket trading on Friday. With a bullish outlook, JPMorgan analyst Harlan Sur has raised Broadcom stock's price target to $210 by December 2025, reflecting confidence in the company's continued growth trajectory. Broadcom's AI Revenue Explosion, Strong Guidance Broadcom's AI semiconductor segment continues to deliver impressive numbers, posting 3%-4% quarter-over-quarter growth in the July quarter. There's also potential to accelerate by 10% in the October quarter. Sur now projects AI revenues for FY24 to top $12 billion, a significant increase from the previous estimate of $11 billion. According to JPMorgan's analysis, Broadcom's AI business, which includes custom ASICs and networking solutions, is expected to see a compound annual growth rate of 30%-40% over the next four to five years. This AI-driven surge is coupled with strength in Broadcom's non-AI semiconductor business, which is projected to grow 10% Q/Q in the upcoming quarter. Additionally, demand from major clients like Google's parent Alphabet Inc GOOG GOOGL and Meta Platforms Inc META for AI networking products and 3nm AI ASICs, positions Broadcom for further growth in FY25. Read Also: Broadcom, ABM Industries And 3 Stocks To Watch Heading Into Friday VMware Boost, Cyclical Recovery VMware's acquisition continues to pay off handsomely for Broadcom, with a 25%+ Q/Q growth forecast in the upcoming quarter. VMware's contribution to infrastructure software revenue surged 41% in the third quarter, helping Broadcom's total revenue climb to $13.07 billion, beating consensus estimates of $12.7 billion. Sur highlighted VMware's strong software renewal rates and upsell opportunities, with revenue potentially reaching $4.5-$5 billion per quarter by 2025. The cyclical recovery in traditional networking and server storage further adds to the bullish case. Broadcom is seeing a 20% year-over-year increase in non-AI semiconductor bookings, suggesting a sustained recovery in the next six to 12 months. Broadcom's Future Looks Bright Investors are likely to see continued upside, with Sur projecting a 30x price-to-earnings multiple applied to an estimated $7.00 dollars per share for FY25. With strong AI growth, robust VMware momentum, and a solid recovery in traditional semiconductor sectors, Broadcom is well-positioned to capitalize on its diversified portfolio. The stock remains a "top pick in semiconductors" for JPMorgan. AVGO Price Action: Broadcom stock was trading down 9.02% at $139.03 Friday at publication. Read Next: Broadcom Q3 Earnings: Revenue Beat, EPS Beat, Continued Strength In AI Solutions And VMware, 2024 AI Guidance And More Photo: Shutterstock Market News and Data brought to you by Benzinga APIs

Broadcom Shares Are Trading Lower Today: What You Need To Know - Broadcom (NASDAQ:AVGO)

he company projects AI-related revenues to reach $12 billion in 2024, while VMware's contribution to infrastructure software revenue surged. Shares of Broadcom Inc. AVGO are trading lower Friday, despite the company reporting robust third-quarter earnings that exceeded market expectations. Here's what you need to know. Earnings Recap: The company reported revenue of $13.072 billion, beat analyst estimates of $12.96 billion. This marks a significant 42% increase compared to last year. Earnings per share (EPS) also beat expectations, coming in at $1.24 against the forecasted $1.20. The strong performance was driven by robust demand for Broadcom's AI semiconductor solutions. AI and VMware: The Twin Engines of Growth Broadcom's AI business continues to gain momentum, with quarter-over-quarter growth of 3%-4% in the July quarter. The AI-driven surge is complemented by strength in Broadcom's non-AI semiconductor segment, expected to grow 10% in the upcoming quarter. VMware, acquired by Broadcom, has also significantly contributed, with infrastructure software revenue surging 41% in the third quarter. Analyst Reactions JPMorgan analyst Harlan Sur remains bullish, raising the stock's price target to $210 by December 2025, based on Broadcom's diversified growth drivers. However, despite these positive developments, some analysts noted that Broadcom's guidance could have been more aggressive, reflecting a cautious approach amid uncertain market conditions. Major firms, including Benchmark, Goldman Sachs, Morgan Stanley and Cantor Fitzgerald, have reiterated their Buy or Overweight ratings. Market Reaction: A Selloff The selloff comes as a surprise, especially given the company's strong financial performance and promising outlook. The stock had dipped as much as 9.4% in premarket trading following the earnings release. Looking Ahead: What's Next for Broadcom? Broadcom's management has set its sights on a strong finish to the year, with fourth-quarter revenue expected to reach approximately $14 billion. The company also anticipates adjusted EBITDA to be around 64% of the projected revenue, indicating continued profitability. AVGO Price Action: Broadcom shares were down by 9.7% at $138.00 according to Benzinga Pro. See Also: JP Morgan Shows Most Interest In Teva, Organon As Specialty Pharma Sector Exhibits Signs Of Stability Image Via Shutterstock. Market News and Data brought to you by Benzinga APIs