Broadcom expected to highlight AI, WMware in Q3 earnings call

Broadcom (NASDAQ:AVGO) will probably spotlight the rising income from its synthetic intelligence phase, in addition to from its WMware acquisition, when it releases its third quarter fiscal 2024 outcomes on Thursday after the markets shut.

Broadcom is anticipating year-over-year income progress of 15% for the quarter.

“This progress is basically pushed by the mixing of VMware and the rising demand for AI merchandise,” in line with In search of Alpha analyst Oliver Rodzianko. “Moreover, the AI phase is a major driver of Broadcom’s progress, with expectations that its AI-related revenues might attain $10B in 2024, which is up from $4.2B in 2023. This pattern in AI demand can also be supporting its partnerships with main tech corporations for customized AI chips.”

Rodzianko charges Broadcom at Maintain at this level because of its excessive valuation.

Nonetheless, In search of Alpha analyst Victor Dergunov offers Broadcom a Purchase score forward of the upcoming monetary outcomes.

“Broadcom gives market-leading AI networking and connectivity options, revolutionizing the business,” he stated. “Broadcom has important progress potential within the profitable AI enterprise market.”

“Broadcom ought to have one other strong quarter, probably making its inventory a robust purchase going into earnings, in addition to a strong purchase within the intermediate and long run,” he added.

Broadcom shares spiked to greater than $180 in June, however have since moderated.

In the meantime, In search of Alpha analyst Searching Alpha, who additionally charges Broadcom at Purchase, expects important progress from VMware.

“I anticipate VMWare’s progress to outpace that of the general firm within the upcoming quarters,” Searching Alpha stated in a current evaluation. “At the moment, VMware is ticking at a quarterly run-rate of $2.7B, posting a sequential progress of 30% QoQ within the newest quarter.”

Broadcom has a Purchase score from In search of Alpha analysts and Wall Road analysts. Nonetheless, it has a Maintain score from In search of Alpha’s Quant system.

When Broadcom releases its monetary outcomes on Sept. 5, the consensus estimate requires adjusted earnings per share of $1.20 on income of $12.96B.

Final quarter, Broadcom beat the earnings per share estimate by $0.01, however surpassed the income estimate by almost half-a-billion {dollars}.