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Analysts expect chip major Broadcom (NASDAQ:AVGO) to beat consensus as the company readies to post its Q2 results on Thursday, June 5, after markets close.
Wall Street’s consensus revenue estimate is $14.97B, a 20% year-on-year rise whereas EPS is seen coming in at $1.57, a nearly 85% fall from the corresponding quarter a year ago.
Over the last 2 years, AVGO has beaten EPS estimates 100% of the time and has beaten revenue estimates 88% of the time. Over the last 3 months, EPS estimates have seen 22 upward revisions and no downward adjustments while revenue estimates have seen 22 upward revisions and 3 downward moves. The company’s shares have added more than 11% in the year so far.
Seeking Alpha analyst Hunting Alpha expects the company to beat estimates on the back of custom ASIC growth, especially from Alphabet (GOOGL) and strong chip market trends. On the other hand, another analyst, Oakoff Investments believes that AI will be central to the firm’s Q2 results and sees earnings beat driven by AI momentum and non-AI recovery.
“For Q2 specifically, AVGO guided for AI revenue of ~$4.4 billion, which is going to be up 44% YoY, and I think the odds are that AVGO beats this internal projection once again,” said Oakoff Investments.
Beyond AI, the non-AI and non-software segments are also showing signs of improvement. The broadband business, which hit a low in Q4 2024, bounced back with strong growth in Q1 and is expected to grow again in Q2 as service providers ramp up spending, the analyst said citing the management. Server storage is also forecast to see moderate sequential growth after recent declines, as per the company.
“Combining all that, even if the non-AI semiconductor revenue remains flat on a QoQ basis in Q2, I think that the growth in bookings that we saw in Q1 (and will likely see in Q2) should give AVGO a nice foundation for a stronger 2H 2025,” Oakoff Investments added.
Analyst Hunting Alpha in their article pointed out a major area of concern with respect to Broadcom’s exposure to Apple (AAPL). Arguing that a considerable chunk of AVGO’s business comes from the iPhone maker, the analyst said that a potential hit to Apple’s revenue due to the tariffs on top of a stagnant growth in iPhone revenues could become a headwind for the chipmaker.
They are looking forward to the management’s comments on Broadcom’s revenue dependence on Apple and how the effect of tariffs on Apple’s business could impact the company.