Broadcom AVGO shares have been performing well, gaining 24.5% in a month and outperforming the S&P 500 index. The company has been attracting investors’ attention due to its focus on artificial intelligence and a recent 10-for-1 stock split. In Q2 FY2024, AVGO saw a significant increase in AI sales, with expectations to exceed $11 billion by FY2024.
Broadcom’s portfolio offerings include advanced technologies like the Bailly combo-packaged optical Ethernet switch and the Tomahawk 5 switch chip, which enhance AI infrastructure performance. Their new PCIe Gen 5.0 400G Ethernet adapters are set to transform data centers with superior efficiency.
The company’s expanding clientele, including prominent companies like Alphabet and Meta Platforms, has been a key factor in its growth. Partnering with companies like Arista Networks, Dell, Juniper, and Supermicro has led to a doubling of sales for PAM-5 and Jericho 3 in Q2 FY2024.
Looking ahead, AVGO expects strong revenue growth for fiscal 2024, with revenue projected to reach $51 billion and an adjusted EBITDA margin of 61%. Analysts are bullish on the company’s growth potential, with a Zacks Consensus Estimate suggesting significant year-over-year growth for both revenue and earnings.
However, concerns about sluggish broadband and server storage end markets may impact the near-term outlook. Broadcom’s valuation is also seen as stretched, according to the F Value Score. As a result, investors may want to wait for a better entry point before considering an investment.
Broadcom currently holds a Zacks Rank #3 (Hold). For more information and recommendations from Zacks Investment Research, investors can access The 7 Best Stocks for the Next 30 Days report.
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https://finance.yahoo.com/news/broadcom-24-month-play-avgo-190000890.html
