Broadcom (AVGO) -) shares moved firmly higher Thursday ahead of the network-equipment chipmaker's third-quarter earnings, scheduled for after the closing bell.
Analysts expect the group, which is accelerating the production of AI-focused chips, to post an adjusted bottom line of $10.42 per share, up 7.1% from a year earlier. Group revenue is forecast to nudge modestly higher to $8.86 billion, with investors likely focused on plans to ramp chip sales over the coming quarters.
The San Jose, Calif., group will also likely provide further details on the state of play regarding its $69 billion takeover of enterprise software group VMware, which late last month was given preliminary support from competition authorities in the U.K. The deal is also being probed by the U.S. Federal Trade Commission.
"Broadcom continues to benefit from several growth catalysts, particularly in the wireless sector driven by the rollout of 5G technology and the networking domain leveraging its generative AI capabilities," said Crispidea analyst Pratik Mundra. He carries a buy rating with a $938 price target on Broadcom stock.
"While the company is enjoying robust demand for its networking solutions, driven by significant growth in AI infrastructure and compute offload, challenges arise from wireless sector setbacks and weaker Chinese market performance," he added.
Broadcom shares were last marked 2.7% higher in afternoon Thursday trading and changing hands at $916.22 each, a move that extends the stock's year-to-date gain to around 67% and values the San Jose, California-based tech group at just under $378 billion.
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