The price of AVGO has soared to $256.85 after lows of $140 in April. Double top potential exists at $251.52 for the chipmaker.
Broadcom is developing AI inference chips for companies like OpenAI and Apple, which has Wall Street analysts positive about the firm’s outlook. The company’s most recent earnings report beat analysts’ expectations, but also showed growth in the AI business and analysts are hoping for further growth in the upcoming earnings released on Thursday.
The first-quarter earnings report released on March 6 said that Broadcom delivered revenue of $14.9 billion, beating estimates of $14.6 billion for a 25% year-over-year increase. Earnings per share were stronger at 45.5% annually.
Broadcom and other tech firms are reeling from the Trump administration’s efforts to block access to the Chinese, so earnings reports are analysed to see how companies can beat that obstacle.
Broadcom’s technology is important for data centers, broadband networks, wireless systems, and storage platforms. The current market cap is near $1.2 trillion, so there is a lot riding on the upcoming earnings report.
A deeper dive into the results from Q1 showed that the infrastructure software segment saw a revenue jump of 47% to $6.7 billion. But the real growth engine was the AI business, with revenue reaching $4.1 billion in the quarter, for an impressive 77% year-over-year increase. That led to a boost for the company’s semiconductor solutions segment with $8.2 billion in revenue, up 11% from the previous year.
The positive results have helped to fuel a very strong rebound in AVGO stock from the April lows. A good performance is needed if the $251 level can be a double top.
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