Broadcom rises as Wall Street believes infrastructure results will be 'resilient'
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Broadcom (NASDAQ:AVGO) shares rose around 0.5% - though well off the best levels of the session - as Wall Street analysts said the company's infrastructure results are likely to be "resilient" in the near-term.
KeyBanc Capital Markets analyst John Vinh said the company is benefiting from multiple upgrade cycles in both networking and broadband, as well as benefiting from custom ASIC demand associated with generative artificial intelligence, calling out Google's (GOOG) (GOOGL) TPUs as an example.
"We expect AVGO to post in-line to slightly higher results and guidance," Vinh wrote in an investor note.
Vinh also noted that investor sentiment on Broadcom (AVGO) is "slightly positive," citing recent trends in generative AI, and the company's recent deal with Apple (AAPL).
J.P. Morgan analyst Harlan Sur said Broadcom (AVGO) could see more than $4B in TPU chip sales next year, as it works on designing Google's (GOOG) (GOOGL) six-generation chip, set to be released in either 2024 or 205. Sur also noted Broadcom (AVGO) could benefit from others, such as Meta (META), looking to design their own custom chips.
"The company should be a strong beneficiary of the trends towards more custom chip designs as large cloud titans/OEMs look to drive more performance/power/cost/differentiation alongside their software frameworks," Sur wrote in an investor note.
Broadcom (AVGO) is slated to report second-quarter results on June 1 after the close of trading.
A consensus of analysts estimate $10.12 per share in earnings and $8.7B in revenue.
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