S&P 500   4,278.79 (-0.61%)
DOW   34,009.30 (-0.42%)
QQQ   328.96 (-1.00%)
AAPL   174.96 (+1.12%)
MSFT   291.51 (-0.41%)
META   175.79 (-2.05%)
GOOGL   120.08 (-1.33%)
AMZN   142.48 (-1.59%)
TSLA   912.44 (-0.79%)
NVDA   183.80 (-2.64%)
NIO   20.20 (-3.40%)
BABA   90.10 (-2.75%)
AMD   98.39 (-1.81%)
MU   61.65 (-3.46%)
T   18.44 (-0.70%)
CGC   4.04 (+6.88%)
F   16.07 (-2.19%)
GE   79.81 (-1.55%)
DIS   123.12 (-1.47%)
AMC   22.29 (-10.16%)
PYPL   99.96 (-2.08%)
PFE   49.41 (-0.90%)
NFLX   241.19 (-1.83%)
S&P 500   4,278.79 (-0.61%)
DOW   34,009.30 (-0.42%)
QQQ   328.96 (-1.00%)
AAPL   174.96 (+1.12%)
MSFT   291.51 (-0.41%)
META   175.79 (-2.05%)
GOOGL   120.08 (-1.33%)
AMZN   142.48 (-1.59%)
TSLA   912.44 (-0.79%)
NVDA   183.80 (-2.64%)
NIO   20.20 (-3.40%)
BABA   90.10 (-2.75%)
AMD   98.39 (-1.81%)
MU   61.65 (-3.46%)
T   18.44 (-0.70%)
CGC   4.04 (+6.88%)
F   16.07 (-2.19%)
GE   79.81 (-1.55%)
DIS   123.12 (-1.47%)
AMC   22.29 (-10.16%)
PYPL   99.96 (-2.08%)
PFE   49.41 (-0.90%)
NFLX   241.19 (-1.83%)
S&P 500   4,278.79 (-0.61%)
DOW   34,009.30 (-0.42%)
QQQ   328.96 (-1.00%)
AAPL   174.96 (+1.12%)
MSFT   291.51 (-0.41%)
META   175.79 (-2.05%)
GOOGL   120.08 (-1.33%)
AMZN   142.48 (-1.59%)
TSLA   912.44 (-0.79%)
NVDA   183.80 (-2.64%)
NIO   20.20 (-3.40%)
BABA   90.10 (-2.75%)
AMD   98.39 (-1.81%)
MU   61.65 (-3.46%)
T   18.44 (-0.70%)
CGC   4.04 (+6.88%)
F   16.07 (-2.19%)
GE   79.81 (-1.55%)
DIS   123.12 (-1.47%)
AMC   22.29 (-10.16%)
PYPL   99.96 (-2.08%)
PFE   49.41 (-0.90%)
NFLX   241.19 (-1.83%)
S&P 500   4,278.79 (-0.61%)
DOW   34,009.30 (-0.42%)
QQQ   328.96 (-1.00%)
AAPL   174.96 (+1.12%)
MSFT   291.51 (-0.41%)
META   175.79 (-2.05%)
GOOGL   120.08 (-1.33%)
AMZN   142.48 (-1.59%)
TSLA   912.44 (-0.79%)
NVDA   183.80 (-2.64%)
NIO   20.20 (-3.40%)
BABA   90.10 (-2.75%)
AMD   98.39 (-1.81%)
MU   61.65 (-3.46%)
T   18.44 (-0.70%)
CGC   4.04 (+6.88%)
F   16.07 (-2.19%)
GE   79.81 (-1.55%)
DIS   123.12 (-1.47%)
AMC   22.29 (-10.16%)
PYPL   99.96 (-2.08%)
PFE   49.41 (-0.90%)
NFLX   241.19 (-1.83%)

Broadcom Is Primed To Hit A New All-Time High 

Broadcom Is Primed To Hit A New All-Time High 

Broadcom Pops On Results, VMWare Deal 

Price action in Broadcom (NASDAQ: AVGO) experienced significant downward pressure over the past two quarters but we think those days are behind the stock. The downward pressure is due in large part to institutional selling that we see ending now the Q2 results are in the bag. The institutional selling reached a fear-driven crescendo just before the results were released and those results did not confirm those fears. If anything, the results point to ongoing strength for this company and more. The addition of VMWare to the fold will not only increase top-line results but offer a plethora of synergies and cross-selling opportunities. 

Broadcom Exceeds Expectations In Q1 

Broadcom’s Q1 results were better than expected on all levels. The company reported $8.1 billion in net revenue for a gain of 22.5% which beat the Marketbeat.com consensus by 240 basis points. The strength was driven by a 29% increase in Semiconductor Solutions which is the largest segment by far. The Infrastructure Software segment, which is about 25% of the net revenue, grew by a smaller 5% but both segments aided margin expansion. In regard to margin, the company’s net income grew by 34% while the adjusted EPS of $9.07 grew by 37%. The adjusted earnings also beat the consensus estimates and by a larger 400 basis point margin as well. 

Turning to the guidance, the company is expecting to see business momentum carry into the Q3 period at least and has increased its guidance accordingly. The new guidance is calling for quarterly revenue in the range of $8.4 billion compared to the $7.97 billion Marketbeat.com consensus estimate. We find this guidance favorable as well as the expected adjusted EBITDA margin of 63.5%. In our view, the guidance is not only favorable but there is upside risk assuming supply chain and manufacturing log-jams begin to ease as they are expected to do. 


The Analysts Are Buying Broadcom 

The analysts are buying Broadcom even if the institutions are selling. The 25 analysts with current ratings on the stock have it pegged at a firm Buy and that has been steady over the last 12 months at least. What is not steady is the Marketbeat.com consensus price target which is trending higher versus last year, 3 months, and 1 month ago. There have been at least 3 commentaries released since the Q2 results came out and all three of them include price target increases as well. The key takeaway is the most recent three targets include the new high target of $780 and have the stock trading at least 5% above the current consensus, in new all-time high territory.

And one of the reason’s the analysts are buying Broadcom is the capital return program. Broadcom pays a safe 2.8% and a high yield for tech while buying back stock. The company not only bought back $3.29 billion worth of stock in Q2 but also added about $7 billion to the existing authorization bringing available funds for buybacks up to $10 billion. That’s about 4% of the market cap and could be spent within the next 4 quarters. 

The Technical Outlook: Broadcom Hits Bottom, Bounces 

The institutions drove Broadcom's price action down to a key support level at $525 just before the earnings release and now the price action is moving higher. The bounce looks strong and confirms support and a bottom at $525 that we see holding in the absence of bad news. The indicators are consistent with a bottom at this level so we are expecting range-bound trading at the very least. The next hurdle for the market is in the range of $600 to $625, if the price action can get above there a test of the all-time high is the next move, if not a move up to set a new all-time high. 

Broadcom Is Primed To Hit A New All-Time High 

Companies Mentioned in This Article

CompanyMarketRank™Current PricePrice ChangeDividend YieldP/E RatioConsensus RatingConsensus Price Target
Broadcom (AVGO)
2.9386 of 5 stars
$542.29-1.7%3.02%26.89Moderate Buy$680.46
Compare These Stocks  Add These Stocks to My Watchlist 

Should you invest $1,000 in Broadcom right now?

Before you consider Broadcom, you'll want to hear this.

MarketBeat keeps track of Wall Street's top-rated and best performing research analysts and the stocks they recommend to their clients on a daily basis. MarketBeat has identified the five stocks that top analysts are quietly whispering to their clients to buy now before the broader market catches on... and Broadcom wasn't on the list.

While Broadcom currently has a "Moderate Buy" rating among analysts, top-rated analysts believe these five stocks are better buys.

View The Five Stocks Here

Free Email Newsletter

Complete the form below to receive the latest headlines and analysts' recommendations for your stocks with our free daily email newsletter:

Most Read This Week

Recent Articles

Search Headlines:

Latest PodcastESG - Profitably Invest Your Values

David McNatt discusses ESG investing and offers ways to avoid pitfalls and to understand exactly what kinds of companies you are buying.

MarketBeat Resources

Premium Research Tools

MarketBeat All Access subscribers can access stock screeners, the Idea Engine, data export tools, research reports, and other premium tools.

Discover All Access

Market Data and Calendars

Looking for new stock ideas? Want to see which stocks are moving? View our full suite of financial calendars and market data tables, all for free.

View Market Data

Investing Education and Resources

Receive a free world-class investing education from MarketBeat. Learn about financial terms, types of investments, trading strategies and more.

Financial Terms
Details Here
MarketBeat - Stock Market News and Research Tools logo

MarketBeat empowers individual investors to make better trading decisions by providing real-time financial data and objective market analysis. Whether you’re looking for analyst ratings, corporate buybacks, dividends, earnings, economic reports, financials, insider trades, IPOs, SEC filings or stock splits, MarketBeat has the objective information you need to analyze any stock. Learn more about MarketBeat.

MarketBeat is accredited by the Better Business Bureau MarketBeat is rated as Great on TrustPilot

© American Consumer News, LLC dba MarketBeat® 2010-2022. All rights reserved.
326 E 8th St #105, Sioux Falls, SD 57103 | contact@marketbeat.com | (844) 978-6257
MarketBeat does not provide personalized financial advice and does not issue recommendations or offers to buy stock or sell any security.

Our Accessibility Statement | Terms of Service | Privacy Policy | Do Not Sell My Information | RSS Feeds

© 2022 Market data provided is at least 10-minutes delayed and hosted by Barchart Solutions. Information is provided 'as-is' and solely for informational purposes, not for trading purposes or advice, and is delayed. To see all exchange delays and terms of use please see Barchart's disclaimer.