Semiconductor and infrastructure software solutions provider Broadcom (AVGO) is scheduled to announce its results for the third quarter of Fiscal 2025 after the market closes on Thursday, September 4. AVGO stock has risen more than 28% year-to-date, reflecting investors’ optimism about the company’s custom artificial intelligence (AI) chips. Wall Street expects Broadcom to report Q3 FY25 earnings per share (EPS) of $1.66, reflecting a 34% year-over-year growth.
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Meanwhile, the consensus Q3 FY25 revenue estimate of $15.8 billion indicates 21% growth compared to the prior-year quarter.
Analysts’ Views Ahead of Broadcom’s Q3 Earnings
Heading into Q3 results, Piper Sandler analyst Harsh Kumar raised the price target for Broadcom stock to $315 from $300 and reiterated a Buy rating. The 5-star analyst is bullish about both the core semiconductor business and the infrastructure software segment. Kumar highlighted that the semiconductor business is benefiting from strong AI-led growth. He expects Q3 AI semiconductor revenue to grow by 60% year-over-year to $5.1 billion, with the possibility of an upside.
For the July quarter non-AI sales, Kumar expects business to be essentially flat. The analyst believes that the non-AI business is at the “cusp of a recovery,” with some segments improving, while others remain flat to down.
Additionally, Goldman Sachs analyst James Schneider reiterated a Buy rating on AVGO stock with a price target of $340. The 4-star analyst expects investors to focus on near-term XPU (custom chips) revenue contribution in Q3 and Q4 FY25, new customer engagement, and any update on FY26 AI revenue guidance. Schneider added that investors will also look forward to details on gross margin trajectory.
Schneider believes expectations are high ahead of the Q3 FY25 quarter, but many investors are cautious, given the stock’s elevated valuation. The analyst expects an in-line quarter and guidance. That said, he believes that commentary on FY26 AI revenue expectations could move AVGO stock higher, with three focus areas on the earnings call: potential upside to FY26 AI revenue guidance, XPU (custom chips) contributions expected in Q3/Q4, and the pace of recovery in the enterprise business.
AI Analyst Is Bullish on Broadcom Stock Ahead of Q3 Print
Interestingly, TipRanks’ AI Analyst has assigned an Outperform rating to Broadcom stock with a price target of $350, indicating 17.4% upside potential. TipRanks’ AI analysis reflects solid financial performance and positive insights from the earnings call. Specifically, AVGO’s strong growth in AI and software segments, along with effective cost management, supports AI Analyst’s bullish outlook.
However, the high P/E ratio reflects valuation concerns, which slightly temper the overall score assigned by the AI Analyst.
Options Traders Anticipate a Major Move on AVGO’s Q3 Earnings
Using TipRanks’ Options tool, we can see what options traders are expecting from the stock immediately after its earnings report. The expected earnings move is determined by calculating the at-the-money straddle of the options closest to expiration after the earnings announcement. If this sounds complicated, don’t worry, the Options tool does this for you.
Indeed, it currently says that options traders expect about a 7.3% move in either direction in AVGO stock in reaction to Q3 FY25 results.
Is AVGO Stock a Buy, Sell, or Hold?
Overall, Wall Street has a Strong Buy consensus rating on Broadcom stock based on 27 Buys and two Hold recommendations. The average AVGO stock price target of $314.42 indicates 5.4% upside potential.
