Why Broadcom Should Beat Earnings Again (Preview)

Summary:

• Broadcom reported quite strong results for its fiscal Q3 2024 on the back of its AI-centric strategy, VMware integration, and consolidation in its non-AI semiconductor segment.
• I strongly believe that the AI-centric focus, strict cost management, and successful integration of VMware set Broadcom up for success.
• Today’s valuation of the stock looks reasonable if we take into account the prospective growth rates.
• Judging by how AVGO’s peers have reported in recent weeks, I think these weak expectations form a favorable ground for beating Q4 consensus.
• I reiterate “Buy” for AVGO stock ahead of its Q4 FY2024 earnings release (set for 12/12/2024).

Intro & Thesis

I initiated coverage of Broadcom Inc. (NASDAQ:AVGO) stock on July 20, 2023, with a “Hold” rating, which I upgraded to “Buy” in April 2024, admitting my mistake and assuming that the

Analyst’s Disclosure: I/we have a beneficial long position in the shares of AVGO either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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