2024-06-08 14:00:00 ET
Summary
- AVGO has established $1.2K as its floor, thanks to the robust networking sales growth in FQ1'24 and raised networking/ AI-related guidance in FY2024.
- Much of the tailwinds are probably attributed to the highly insightful commentaries and promising forward guidance from multiple generative AI players, lending strength to hyperscaler growth in general.
- As a result, we believe that AVGO is likely to exceed consensus estimates in the upcoming June 12, 2024 earnings call, with another raise in AI-related guidance.
- Readers must also note that its growing multi-year Remaining Performance Obligation and rich SaaS margins lend further insights to its long-term top/ bottom lines.
- This is also why we believe that AVGO is reasonably valued, with the clear trading pattern offering interested investors with an improved margin of safety.
We previously covered Broadcom (NASDAQ: AVGO ) in February 2024, discussing why we had finally upgraded the stock as a Buy, after multiple rounds of Hold rating.
This was attributed to its reasonable FWD valuations compared to its peers and the management's highly optimistic FY2024 forward guidance, with the consensus already moderately raising their estimates through FY2026....
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Broadcom: Compelling Buy, Thanks To Raised AI Guidance