Broadcom Surges on Strong AI Outlook, Stock Split
Broadcom shares are soaring Thursday after the chipmaker's beat-and-raise quarter and news it is splitting its stock. Here's what you need to know.


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."
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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.
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Joey Solitro is a freelance financial journalist at Kiplinger with more than a decade of experience. A longtime equity analyst, Joey has covered a range of industries for media outlets including The Motley Fool, Seeking Alpha, Market Realist, and TipRanks. Joey holds a bachelor's degree in business administration.
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