Key Stats for Broadcom Stock
- Price Change for $AVGO stock: 9%
- Current Share Price: $332
- 52-Week High: $332
- $AVGO Stock Price Target: $308
What Happened?
Broadcom (AVGO) stock is surging after the chipmaker reported fiscal third-quarter earnings that beat Wall Street expectations and provided robust guidance for the current quarter.
It posted adjusted earnings per share of $1.69 versus the $1.65 expected, while revenue of $15.96 billion topped the $15.83 billion consensus estimate.
The real catalyst driving investor excitement was CEO Hock Tan’s announcement that Broadcom had secured $10 billion in orders for its custom AI chips, called XPUs, from a fourth major customer.
“One of these prospects released production orders to Broadcom, and we have accordingly characterized them as a qualified customer for XPUs,” Tan said on the earnings call.
Broadcom’s AI semiconductor revenue jumped 63% year-over-year to $5.2 billion in the quarter, beating the company’s prior prediction of $5.1 billion.
It expects AI revenue to reach $6.2 billion in the fourth quarter and has provided strong Q4 revenue guidance of $17.4 billion, which is well above the $17.02 billion Wall Street expected.
See analysts’ growth forecasts and price targets for Broadcom stock (It’s free!) >>>
What the Market Is Telling Us About AVGO Stock
The market’s enthusiastic response to AVGO stock reflects growing confidence in Broadcom’s position as a credible alternative to Nvidia in the AI chip market.
With its custom processors potentially threatening Nvidia’s dominant market share over time, investors see long-term value creation potential.
The $10 billion order from a fourth customer validates Broadcom’s strategy of developing custom AI accelerators for major cloud companies. In comparison, the strong performance of VMware’s software (revenue up 43% to $6.79 billion) demonstrates the success of the company’s diversification efforts.
With Broadcom’s market cap now exceeding $1.4 trillion and AVGO stock having nearly doubled over the past 12 months, the momentum appears to be building as the company executes on its AI growth strategy.
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Disclaimer:
Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any stocks mentioned. Thank you for reading, and happy investing!
