Truist Securities Reiterates Buy on Broadcom, $510 Price Target

Truist Securities analyst William Stein reiterated a Buy rating and $510.00 price target on Broadcom Limited (NASDAQ: AVGO).

“CQ4 (Jan) beat: Revs beat: $19,311m, 0.3% above consensus of $19,256m. Semis beat consensus by 0.9%. Importantly, AI semi revenue was $8.4B, 2.4% above our model of $8.2B.

Software missed consensus by 2.8%. GPM inline: 77.0%, matched consensus. OPM beat: 66.4%, 70bps above (unguided) consensus of 65.7%.

EBITDA beat: $13,128m, 68%/revs, 2.9% above consensus of $12,755m and 100bps above guidance of 67%/revs. EPS beat: $2.05, 2c above (unguided) consensus of $2.03.

Inventory: Inventory increased ~9 days q/q to ~60 days. This is above the typical seasonal decline of ~1 day.

CQ1 (Apr) guidance well above consensus: Revs beat: Revenue guidance of $22,000m was 7.3% above consensus of $20,503m.

Importantly, AVGO noted that AI semi revenue will be $10.7B in CQ1, 11.5% above our model of $9.6B.”

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