Semiconductor stocks have rebounded this week, led by Nvidia and Broadcom, which one analyst called top picks.
Examine the evolution of Broadcom Inc.'s (AVGO) overseas revenue trends and their effects on Wall Street's forecasts and the stock's prospects.
Investors pressed the panic button following Broadcom's latest results, but they shouldn't miss the bigger picture. The chipmaker's AI-related sales are growing at a nice pace, and its non-AI business has started stabilizing as well.
Dividend stocks that aggressively grow their payouts can be more valuable than income stocks with long growth streaks. Companies with resilient operations and strong growth prospects can make for excellent long-term investments.
Broadcom "disappointed" with guidance on its recent earnings release. But AI chips and VMware are growing fast, and will now make up over half of revenue.
Broadcom's recent earnings beat expectations, but guidance fell short, leading to a "sell-the-news" reaction. However, this presents a buying opportunity. Broadcom's stock is relatively inexpensive with a forward P/E ratio around 20x - 22x, and it has strong potential for future EPS growth and multiple expansion. Despite a 30% correction, Wall Street remains bullish with price targets ranging from $155 to $240, indicating significant upside potential.
Apple unveiled four iPhone 16 devices yesterday. Each of the iPhone 16 lines will support Wi-Fi 7, and KeyBanc expects Broadcom to provide key hardware to enable the technology.
Early investors who bought Broadcom at its IPO have seen their investments grow tremendously. Broadcom executed a 10-for-1 stock split in July, meaning investors now have 10 shares for every share they initially purchased.
Broadcom is a semiconductor bellwether with growing AI exposure. AVGO's AI revenue outlook disappointed the market as investors likely wanted more. I assess that there isn't a structural slowdown in the AI upcycle, suggesting near-term weakness is likely overstated.
Nvidia dominates merchant GPU chips that run the most advanced AI. However, every cloud giant is now investing in their own in-house custom ASICs to train AI.
Broadcom's latest earnings report exceeded Wall Street's expectations. It raised its revenue and adjusted EBITDA guidance for the full year.
Broadcom's business is seeing strong AI-related growth. Its other business segments outside of AI and VMware continue to struggle.