J.P. Morgan analyst Harlan Sur maintained an obese ranking on Broadcom Inc. (NASDAQ:AVGO) with a $210 price target.
Broadcom to report fourth quarter 2024 outcomes THURSDAY. Sur famous a powerful demand profile for AI merchandise, continued cyclical restoration in its diversified semiconductor (ex-AI) finish markets and unlocked VMWare income synergy.
In consequence, the analyst expects income, earnings and free money circulation to be higher than JP Morgan and consensus expectations (income of $14.2 billion to $14.3 billion). in opposition to a consensus of $14.1 billion). It forecast adjusted EPS of $1.40.
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On a better This fall foundation, Sur famous Q1 2025 income steerage of $14.2 billion to $14.4 billion (flat sequential progress beneath consensus of $14.64 billion ) and nearer to the analyst's decrease estimates of $14.4 billion. It forecast adjusted EPS of $1.46.
Sur famous that the decrease income forecast is because of extra seasonal tendencies in its core semiconductor companies, mixed with a product transition at its giant AI ASIC buyer. Googlehowever partially offset by continued software program renewals at VMware and a powerful AI community.
Sur famous that the AI manufacturing transition entails a product shift from the 5nm TPU inference chip to the 3nm TPU v6 coaching chip, which is anticipated to end in a brief pause in AI ASIC income within the first trimester.
Nevertheless, Sur expects sequential progress to renew within the second quarter because the 3nm TPU v6 forming chip enters a high-volume ramp. This must be a powerful tailwind for the remainder of fiscal year 2025.
General, for fiscal 2025, Sur expects increased full-year income and EPS, continued sturdy demand for its AI merchandise, and a extra synchronized restoration in finish market in its diversified semiconductor finish markets (ex-IA) all year long.
On expects Broadcom to generate $12 billion to $12.5 billion in AI income in fiscal 2024 (up 3 times from the prior yr) with adjusted EPS of 4 .84 and generates $17-18 billion in AI income in FY 2025 (40%+ progress) and adjusted EPS of $6.34 because of the continued sturdy ramp-up of Google's TPU AI processor and the ramp-up of full-fledged manufacturing in Méta Plateforme Inc's 3nm MTIA AI processor, mixed with continued sturdy demand for its AI networking merchandise and the beginning of the Tomahawk 6 ramp.
Most significantly, Sur famous that the workforce continues to considerably increase its pipeline of AI ASIC buyer design wins and engagement and lately expanded its AI buyer engagement base to 6 out of 5 prospects .
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