Broadcom rises as analysts praise 'solid' guidance, robust data center demand
Justin Sullivan

Broadcom (NASDAQ:AVGO) shares rose on Friday after the Hock Tan-led semiconductor company posted third-quarter results and guidance that topped estimates, resulting in the praise of several Wall Street analysts.
Mizuho analyst Vijay Rakesh reiterated the firm's buy rating on Broadcom (AVGO) shares, calling out the guidance and data center demand as two key positives for the company and the semiconductor industry at large. 
"[Broadcom] noted demand remains strong across all end markets as customers continue to invest in data center upgrade/refresh and broadband with the Wireless ramp at iPhone ahead," Rakesh wrote in a note to clients.
The analyst added that in the upcoming quarter, Broadcom (AVGO) sees networking up 30% year-over-year, server and storage up 45% year-over-year, wireless up roughly 20% sequentially and 10% year-over-year, aided by the launch of Apple's (AAPL) new iPhone 14. 
Broadcom (AVGO) shares rose more than 2% to $503.84 in premarket trading.
Deutsche Bank analyst Ross Seymore also reiterated his buy rating, noting that despite rising macro and cyclical fears, Broadcom (AVGO) delivered strong results.
"While we do not expect [Broadcom] to remain totally immune from rising macro headwinds, we believe they can weather the situation better than most due to a consistent scrubbing of backlog to ensure shipments are only matching 'true demand', long lead-times on non-cancellable orders, and heavy infrastructure exposure (~80% of revs)," Seymore wrote.
The analyst added that these "defensive" attributes will only become more appealing if the economy weakens further.
SMBC Nikko analyst Reddy Pajjuri raised his estimates on Broadcom (AVGO), while noting that the risk-reward profile is still "particularly attractive."
"The company continues to benefit from secular growth in Cloud/Enterprise/Storage markets as well as iPhone 14 builds in the near term," Pajjuri wrote in a note, adding that multiple product cycles, a stable software business and upside from synergies related to its pending VMware (NYSE:VMW) acquisition are added benefits.
Last month, it was reported that VMware (VMW) was slowing down deals ahead of the Broadcom (AVGO) acquisition, resulting in concerns for both sales people and customers alike.