Broadcom, a leading semiconductor giant, is set to report its Q4 earnings on December 12th. The company’s expertise in custom AI chips drives its next growth phase as AI companies and hyperscalers adjust their CapEX strategies.
Despite some bumps in the road, Broadcom has seen impressive gains of over 190% since the start of 2023, largely driven by strong performance in the semiconductor industry. Analysts forecast a 44% revenue increase for Fiscal 2024, with high demand for its chips fueling growth.
In Q3, Broadcom exceeded top-and-bottom-line expectations, reporting $1.24 per share and $13.07 billion in revenue. While organic growth was lower due to VMware’s acquisition, the company generated strong cash flow from operations, projecting $12 billion in AI-related revenue for Fiscal year 2024.
For Q4, Broadcom guides for $14 billion in revenue, signaling continued growth, with an expected adjusted EBITDA margin of 64%. However, the impact of guidance on Broadcom’s success and future AI growth is a key point. Analysts expect strong AI revenue growth to be sustained, but divergence between GPU and AI growth may affect guidance for Fiscal 2025.
Wall Street analysts are overwhelmingly bullish on Broadcom stock, with ten of eleven analysts rating it as a Buy. The average price target suggests a 10.71% upside potential.
Investors can expect continued growth from Broadcom due to its strong track record of beating earnings expectations and AI-driven demand fueling its expansion. With AI-driven investments planned by hyperscalers in 2025, the stock is poised for steady rises over the mid-to-long term.
Source: https://www.tipranks.com/news/broadcom-pre-earnings-the-key-to-bullish-momentum-lies-in-guidance