Broadcom (AVGO) stock jumped more than 14% out of the gate Thursday after the chipmaker beat expectations for its fiscal second quarter, raised its full-year outlook and announced a 10-for-1 stock split.
In the quarter ended May 5, Broadcom's revenue increased 43% year-over-year to $12.5 billion, driven by a nearly tripling of revenue in its Infrastructure Software segment to $5.3 billion. The company said earnings per share (EPS) rose 6.2% from the year-ago period to $10.96.
"Broadcom's second quarter results were once again driven by artificial intelligence (AI) demand and VMware," Broadcom CEO Hock Tan said in a statement. "Revenue from our AI products was a record $3.1 billion during the quarter. Infrastructure software revenue accelerated as more enterprises adopted the VMware software stack to build their own private clouds."
From just $107.88 $24.99 for Kiplinger Personal Finance
Be a smarter, better informed investor.
Sign up for Kiplinger’s Free Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
Broadcom completed its acquisition of cloud software firm VMware in November 2023.
The company's top- and bottom-line results beat analysts' expectations. According to CNBC, Wall Street was anticipating revenue of $12 billion and earnings of $10.84 per share.
As a result of its strong performance in the first half of its fiscal year, Broadcom raised its full-year outlook. The company now anticipates revenue of approximately $51 billion, up from its previous estimate of $50 billion and ahead of analysts' expectations of $50.4 billion.
Broadcom also announced a 10-for-1 stock split in order "make ownership of Broadcom stock more accessible to investors and employees." Based on AVGO's current price of roughly $1,700, shares will be closer to around $170 once they start trading on a split-adjusted basis at the July 15 open.
Is Broadcom stock a buy, sell or hold?
According to S&P Global Market Intelligence, the consensus analyst target price for the tech stock is $1,751.48, representing implied upside of over 3% to current levels. Additionally, the consensus recommendation is Buy. However, analysts may revise their targets higher following the strong earnings release.
One of the firms raising their target price on AVGO stock following its earnings release is Susquehanna Financial Group, which maintained a Positive rating (equivalent to Buy) and raised its price target to $2,000 from $1,650.
"Broadcom is one of the best integrators in the business, continuing to prove the economies of scale are a viable driver of earnings power for those that can executive in the semiconductor industry," Susquehanna analyst Christopher Rolland said in a note.
Susquehanna's new $2,000 price target represents implied upside of about 18% to current levels.
Related Content
- Kiplinger's Earnings Calendar for This Week
- Should You Invest in Nvidia After Its Stock Split?
- Analysts' Top S&P 500 Stocks to Buy Now
-
Markets Are Quiet Ahead of Fed Day: Stock Market TodayInvestors, traders and speculators appear to be on hold amid an unusually fraught Fed meeting.
-
Quiz: Test Your Knowledge of the OBBB, Wealth Transfer and Early RetirementQuiz The financial professionals who contribute to Kiplinger's Adviser Intel recently wrote about the OBBB's impact on retirement, how to ensure your wealth passes to your family and early retirement questions.
-
Markets Are Quiet Ahead of Fed Day: Stock Market Today
Investors, traders and speculators appear to be on hold amid an unusually fraught Fed meeting.
-
5 Multibagger Stocks With Amazing Returns in 2025multibagger stocks As the term suggests, multibagger stocks multiply your money – gains of 1,200%, for example. Here's where to look for that kind of performance this year.
-
Investing Freebies: Perks You Get for Owning These StocksWhile the biggest investing returns come over the long term, these companies offer instant gratification for investors with several freebies and perks.
-
How an Expired Passport Thwarted Blackmail (and What Other Important Documents You Should Keep)An optometrist produced his expired passport to foil a blackmail attempt by the daughter of a former employee. After proving he was out of the country on the date of a forged diary entry, he took it a step further.
-
Optimize, Grow, Retain: The Power of Annual Client ReviewsFinancial advisers can use annual reviews to help enhance client outcomes, strengthen relationships and build their practice.
-
I'm a Real Estate Investing Pro: This Is What Investors Should Know About Truck Stop InvestmentsTruck stops might seem like good investments, but they can actually be a risky gamble due to unstable fuel prices, unreliable operators and coming changes in transportation. Instead, consider safer options like industrial or residential properties.
-
How Digital Platforms Are Changing the Way You Invest in GoldInvesting in gold is easier than ever thanks to digital platforms. Learn how online tools are lowering costs, increasing transparency and making gold accessible to all investors.
-
Stocks Rise to Start Fed Week: Stock Market TodayThe Nasdaq Composite and S&P 500 hit new record closing highs as Wall Street awaits the Fed's next rate cut.
