Broadcom (AVGO) will likely post upside fiscal Q2 results and a Q3 outlook next week with growth supported by its artificial intelligence computing and networking segments, Oppenheimer said in a note emailed Friday.
Broadcom's semiconductor segment is expected to increase 2% quarter on quarter and 10% year on year in Q2, while the company's AI chip business is expected to grow 7% quarter on quarter to $4.4 billion, the note said.
Oppenheimer highlighted the fact that Broadcom is the undisputed leader when it comes to the supply of custom Application-Specific Integrated Circuit, or ASIC, chips with seven announced projects.
The AI ASIC chip projects for Alphabet (GOOG), Meta Platforms (META) and ByteDance will be the main ones for the company in the near term, the note said.
Oppenheimer increased Broadcom's price target to $265 from $225, while reiterating the company's outperform rating.
Price: 240.65, Change: -1.32, Percent Change: -0.55
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