Google is a major customer of Broadcom’s Application-Specific Integrated Circuits business, as Broadcom helps in designing and manufacturing Google’s TPUs.
- Wall Street expects Broadcom to report earnings per share of $1.87 on revenue of $17.47 billion in the fiscal fourth quarter, according to Stocktwits data.
- One of the drivers behind the optimism around Broadcom’s growth is the expansion of Google’s Tensor Processing Units program to include sales to other companies.
- Until now, Google used TPUs for its own AI infrastructure, but if it begins selling to Meta and other companies, that would increase the demand for its chips and boost Broadcom’s revenue in turn.
Broadcom Inc. (AVGO) is scheduled to report its fiscal fourth-quarter (Q4) earnings after the markets close on Thursday. Ahead of the chipmaker’s results, analysts expressed their bullish outlook about the company’s prospects.
Wall Street expects Broadcom to report earnings per share (EPS) of $1.87 on revenue of $17.47 billion, according to Stocktwits data. During the same period a year ago, Broadcom reported an EPS of $1.42, beating analyst estimates, while its revenue of $14.05 billion missed expectations by a whisker.
For the full fiscal year 2024, Broadcom reported an EPS of $4.87 on revenue of $51.57 billion. Wall Street expects the chipmaker’s EPS to rise to $6.75, while revenue is expected to soar to $63.39 billion for the fiscal year 2025.
Broadcom shares were down 4% in Thursday morning’s trade amid a wider selloff in AI stocks following Oracle Corp.’s (ORCL) mixed third-quarter (Q3) results. Retail sentiment on Stocktwits around the company trended in the ‘bearish’ territory at the time of writing.
Meta Boost
One of the drivers behind the optimism around Broadcom’s growth is the expansion of Google’s Tensor Processing Units (TPU) program to include sales to other companies.
Meta Platforms Inc. (META) is reportedly in talks with Alphabet Inc.’s (GOOG) (GOOGL) Google to purchase or rent the search giant’s TPUs.
Google is a major customer of Broadcom’s Application-Specific Integrated Circuits (ASIC) business, as Broadcom helps in designing and manufacturing Google’s TPUs.
Until now, Google used TPUs for its own AI infrastructure, but if it begins selling to Meta and other companies, that would increase the demand for its chips and boost Broadcom’s revenue in turn.
Bullish Analysts
Rosenblatt analyst Kevin Cassidy on Tuesday raised AVGO's stock price target to $440 from $400, while maintaining a ‘Buy’ rating, according to TheFly. Cassidy expects Broadcom to beat estimates due to accelerating shipments of TPUs.
According to a report by CNBC, Melius Research’s Ben Reitzes was optimistic about Broadcom’s growth, driven by increasing confidence around Google’s AI efforts due to the potential Meta deal as well as the launch of Gemini 3.
“While good for Alphabet, it may turn out to be even better for Broadcom, who could have huge upside to its AI revenues with Alphabet and a host of other partners who want a piece of this design expertise,” he said.
Oppenheimer analyst Rick Schafer noted last week that he expects volumes of Broadcom’s next-gen Tomahawk6 Ethernet switch to ramp up in the second half of next year, which could boost the company’s growth and margins. Schafer hiked his price target for the AVGO stock to $435 from $400, with an ‘Outperform’ rating.
Analysts at Morgan Stanley expect Broadcom to grow its AI processor revenues slightly faster than Nvidia Corp. (NVDA) during the calendar year 2026. BofA expects Broadcom’s shipments of TPUs to surge around 50% in calendar year 2026, rising from two million in 2025 to three million next year.
“Strength in TPU orders should power Broadcom’s estimates higher through next year. Long-term, we would still prefer success with a diverse set of customers for Broadcom across its seven ‘hyperscale’ opportunities,” Melius analyst Ben Reitzes wrote in a note on December 8, according to a report by Bloomberg.
AVGO stock is up 72% year-to-date and 117% over the past 12 months.
For updates and corrections, email newsroom[at]stocktwits[dot]com.<
