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Broadcom Anticipates Double-Digit Q2 Revenue Growth Fueled by AI Chip Demand

Investors await earnings to gauge whether AI revenue growth can justify the stock’s 44.6% rally against elevated valuation tempered by heavy debt.

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A trader working at the New York Stock Exchange on Friday.

Overview

  • Wall Street consensus sees revenue hitting $15.02 billion and net income rising to $7.8 billion driven by AI sales expected to reach $4.42 billion.
  • Broadcom shares have climbed 44.6% since the first quarter’s end, closing at $242.07 on Friday.
  • Hyperscale clients including Microsoft, Alphabet, Amazon and Meta are fueling demand for custom AI chips.
  • Of 14 analysts tracked, 13 rate the stock a buy or equivalent with an average price target near $247 and Oppenheimer lifting its forecast to $265.
  • The company faces a forward price/earnings ratio of 30.93 and $66 billion in long-term debt as it reports Q2 results after Thursday’s close.