Broadcom (AVGO) delivered strong fiscal third-quarter results, fueled by surging demand for custom AI accelerators and continued momentum from its VMware integration. The semiconductor giant’s revenue jumped 22% year-over-year to $15.95 billion, setting a new quarterly record. Also, the figure beat analysts’ estimates of $15.83 billion.
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On the profitability front, AVGO reported adjusted earnings of $1.69 per share, up 36.3% from the year-ago quarter. Further, it surpassed the consensus estimate of $1.66 per share.
CEO Hock Tan attributed the performance to rising AI adoption. He noted that Q3 AI-related revenue soared 63% to $5.2 billion.
Segment-wise, Broadcom’s Semiconductor solutions unit, which reports sales to hyperscalers such as Amazon (AMZN) and Microsoft (MSFT), grew 26% to $9.17 billion. The Infrastructure software business, which includes VMware, saw revenue growth of 17% year-over-year to $6.79 billion during the quarter.
Strong Q4 Outlook
Looking ahead, Broadcom projects fiscal Q4 revenue of about $17.4 billion, up 24% year-over-year. Also, the guided range is well above the Street’s expectations of $17.01 billion.
Notably, the company expects AI revenue of nearly $6.2 billion in Q4, which would mark eleven consecutive quarters of growth in Broadcom’s AI semiconductor business.
AVGO maintained its adjusted EBITDA margin expectations at 67%.
Is AVGO a Good Stock to Buy?
On TipRanks, AVGO stock has a Strong Buy consensus rating based on 27 Buys and two Holds assigned in the last three months. The average Broadcom stock price target of $314.42 suggests an upside potential of 2.77% from its current price. It’s worth noting that estimates will likely change following today’s earnings report.
