This post is written before Broadcom (AVGO $Broadcom(AVGO)$ ) releases its fiscal 2024 third-quarter earnings report, which is scheduled for after the market close on September 5.
Broadcom’s upcoming earnings report is highly anticipated, not just for the company’s results but for the broader insight it will provide into the semiconductor and artificial intelligence (AI) markets. Given Broadcom’s diverse semiconductor portfolio, ranging from networking to AI-specific chips, its performance will offer a key gauge for the health of these sectors. Investors, analysts, and tech watchers alike are focusing on how Broadcom assesses demand in these critical areas.
The company is expected to report $12.98 billion in revenue with adjusted earnings per share (EPS) of $1.22, and its guidance for the next quarter will be equally critical. The market is especially interested in Broadcom’s commentary on AI demand, where the company has positioned itself as a leader in custom chip design for AI-driven companies like Google. Susquehanna analyst Christopher Rolland, for instance, has remained bullish, maintaining a price target of $200 and suggesting that parts of Broadcom’s core semiconductor business, including storage and networking, could be bottoming out.
Should Broadcom deliver a strong earnings report, especially highlighting robust AI demand, we might begin to see the bottom for the semiconductor industry. This would not only be significant for Broadcom but also for the entire chip sector, signaling potential recovery after months of mixed results in the market.
On the flip side, if the report shows weaker demand or disappointing guidance, it could suggest that the chip industry, particularly its AI segment, may face further headwinds. This uncertainty would ripple through the sector and likely lead to increased volatility in related stocks.
With Broadcom up nearly 38% year-to-date, far outpacing the iShares Semiconductor ETF’s 12% rise, the company’s earnings will undoubtedly set the tone for the broader semiconductor market going forward.
@TigerWire
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