Analysts and investors will likely be looking for commentary on artificial intelligence revenue when semiconductor company Broadcom Inc AVGO reports third-quarter financial results Thursday after market close.
Earnings Estimates: Analysts expect Broadcom to report third-quarter revenue of $12.96 billion, according to data from Benzinga Pro.
The company reported revenue of $8.88 billion in last year's third quarter. Broadcom has beaten analyst estimates for revenue in two straight quarters and 16 of the past 17 quarters.
Analysts expect the company to report third-quarter earnings per share of $1.20, compared to $1.05 in last year's third quarter. The company has beaten analyst estimates for earnings in 13 straight quarters.
Thursday's earnings report comes as Broadcom stock is up 42% year-to-date in 2024 as seen on the Benzinga Pro chart below.
Did You Know?
- Nancy Pelosi Owns Broadcom Shares. Get Tips On What They Bought And Sold Ahead Of The 2024 Election With Our Easy-to-Use Tool
What Analysts Are Saying: Broadcom is one of several companies that could benefit from a $150 billion artificial intelligence silicon market opportunity, JPMorgan analyst Harlan Sur said in July.
The analyst said the AI sector sets Broadcom up for growth ahead both in the near term and long term.
"The strong y/y booking trends that the team saw in Apr-Qtr for their non-AI semi business continues to persist into the Jul-Qtr on top of sustained AI order momentum," Sur said.
Sur said the $150 billion AI silicon revenue opportunity could come from four or five customers over the next five years.
"Incumbency is a big competitive advantage for Broadcom in its AI ASIC business and its strong technology capabilities/expertise/IP should drive increasing customer stickiness on higher chip complexities."
The analyst said Broadcom's expertise in Ethernet networking could help the company's leadership in the sector, with the company powering seven of the eight largest AI clusters around the world.
Broadcom was one of several semiconductor winners named in a recent report from Cantor Fitzgerald analyst C.J. Muse.
"Stick with AI first and foremost," Muse said of the semiconductor space.
Muse said when it comes to semiconductor companies and AI, “you either have it or you don’t.”
“2Q continued to show a divergence between the haves and have-nots, with anything AI-related thriving, while other areas remain in the cyclical doldrums.”
Key Items to Watch: The company's AI segment and commentary will be closely monitored by investors and analysts.
"Broadcom's second quarter results were once again driven by AI demand and VMware. Revenue from our AI products was a record $3.1 billion during the quarter. Infrastructure software revenue accelerated as more enterprises adopted the VMware software stack to build their own private clouds," Broadcom CEO Hock Tan said previously.
Broadcom's non-AI business segments could also be an area to watch and one of the underrated areas for investors to focus on.
The company recently announced the launch of enterprise agility platform Rally Anywhere. The company also launched VMware Cloud Foundation 9 and several other platforms in recent months.
Investors and analysts could get updates on the reception for the new products and updates and their revenue potential going forward.
Broadcom's earnings report comes around a week after semiconductor giant Nvidia reported quarterly results. Nvidia beat estimates for both revenue and earnings per share and issued strong guidance. Nvidia shares have fallen since earnings with investors dissecting the smaller growth and beat than in past quarters and concerns for high-growth expectations ahead.
Guidance from Broadcom could prove to be the most important part of the third-quarter results. The company raised its full-year revenue guidance to $51 billion, up from a prior guide of $50 billion, when second-quarter results were reported. Analysts and investors could be banking on another guidance raise after the third quarter.
AVGO Price Action: Broadcom shares trade up 41.39% at $153.46 on Wednesday versus a 52-week trading range of $79.54 to $185.16.
Read Next:
Photo: Shutterstock
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
Comments
Trade confidently with insights and alerts from analyst ratings, free reports and breaking news that affects the stocks you care about.
