Broadcom
is scheduled to report earnings Thursday, and analysts are optimistic about the semiconductor maker’s orders from major tech companies such as
Apple,
Meta Platforms
and
Google.
In midday trading Tuesday, shares of Broadcom (ticker: AVGO) were up 6.5% Tuesday to $865.32, an record high for the stock. The stock has soared 55% this year.
The company and Apple (AAPL) announced a new multibillion-dollar agreement to make 5G radio frequency components and wireless chips. The deal and others, most notably with Google, have Wall Street mostly positive coming into earnings.
“We believe that Broadcom’s custom chip (ASIC) business has continued to see accelerating orders from Google for its advanced artificial-intelligence processor chip called TPU,” JP Morgan analyst Harlan Sur wrote in a research note Tuesday.
Sur, who doesn’t have a rating or price target on the stock, added that Broadcom has said it plans to ship $3 billion in total cloud custom chip revenue between companies such as Alphabet’s Google (GOOGL),
Microsoft
(MSFT), and Meta (META) this year, but he thinks order acceleration from Google implies that Google’s TPU processor program alone could drive $3 billion or more in revenue.
On Monday, KeyBanc Capital Markets analyst John Vinh raised his price target to $820 from $720 and maintained his Overweight rating.
“Despite signs of normalizing supply, backlog coverage and still-long lead times are expected to support results/outlook, coupled with generative AI and the renewal of AAPL’s long-term agreement,” Vinh wrote in a research note.
Vinh expects the company’s numbers will be in line or slightly higher than second-quarter results and guidance.
Of the 27 analysts surveyed by FactSet, 23 rate the stock Buy, three Hold and one Sell.
Write to Angela Palumbo at [email protected]
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