Broadcom, Salesforce in focus amid ratings changes at Erste Group

Broadcom (NASDAQ:AVGO) and Salesforce (NYSE:CRM) were in focus on Thursday as European investment firm Erste Group changed its ratings on the pair.

Broadcom was upgraded to Buy from Hold, while Salesforce was cut to Hold from Buy.

“Broadcom has an attractive product portfolio for network applications, especially software in the field of virtualization, with good growth prospects,” Erste analyst Hans Engel wrote in a note to clients. “The operating margin and return on equity are significantly higher than those of its competitors. The Group expects demand for AI semiconductors to remain strong as customers continue to invest in hardware and connectivity solutions for AI data centers. The stock should continue its upward trend.”

Broadcom is set to report its fiscal first-quarter results after the close of trading. Analysts expect the company to earn $1.57 per share on $14.97B in revenue.

Regarding Salesforce, Erste analyst Stephan Lingnau said revenue and net profit growth are likely to drop year-over-year in the current fiscal year, despite the company’s leading position in customer service, marketing automation and data analysis.

“As sales growth is also lower than that of competitors, the share’s P/E ratio is lower than the sector average,” Lingnau added.