CFRA Keeps Buy on Broadcom

CFRA analyst Angelo Zino reiterated a Buy rating on Broadcom Limited (NASDAQ: AVGO).

“AVGO posted Jan-Q revenue growth of 25% Y/Y to $14.92B, above our +22% forecast.

AVGO’s AI revenue grew 77% Y/Y to $4.1B, beating our 65% forecast, while infrastructure software revenue, bolstered by VMware, rose 47% Y/Y to $6.7B (beating our +41% view).

Non-GAAP EPS rose 45% to $1.60, above consensus at $1.51. Adjusted EBITDA was 68% of revenue, beating our 66% forecast.

Apr-Q revenue guidance of $14.9B (+19% Y/Y) is above the consensus of $14.7B, and adjusted EBITDA at 66% of projected revenue matches our view.

AVGO anticipates continued momentum in its AI semiconductor business, projecting Apr-Q AI revenue of $4.4B, implying +40% growth.

We believe that greater AI semiconductor revenue offers the most upside to AVGO’s business model over the next three years, while software momentum remains healthy a year after lapping VMware.

We note AVGO kept its long-term outlook on its three major hyperscalers and has now cited four customers deeply engaged in custom silicon chips not in its $60B-$90B SAM for FY 27.”

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