Broadcom(US:AVGO) Guoxin Securities·2025-06-08 07:25Investment Rating - The report maintains an "Outperform the Market" rating for the communication industry [4][5][60]. Core Insights - The communication industry is experiencing a high demand for AI-related technologies, with companies like Broadcom and Credo reporting significant revenue growth driven by AI applications [1][12][18]. - Broadcom's new Tomahawk 6 switch chip, capable of 102.4 Tbps, is designed to support large-scale AI networks, indicating a strong focus on enhancing AI infrastructure [1][15][17]. - Credo's revenue for Q4 of FY2025 increased by 180% year-over-year, reflecting the growing demand for AI solutions in cloud services [1][18]. - Wistron reported record revenue in May 2025, driven by a surge in server shipments, highlighting the robust growth in the data center segment [1][23]. Summary by Sections Industry News Tracking - Broadcom's Q2 FY2025 revenue reached 150 billion CNY, a 20% year-over-year increase, with AI revenue exceeding 44 billion CNY, growing by 46% [1][12][14]. - Credo's Q4 FY2025 revenue was 1.70 billion USD, up 179.7% year-over-year, with a net profit margin of 38.4% [1][18][21]. - Wistron achieved a record revenue of 208.4 billion TWD in May 2025, marking a 162.14% increase year-over-year [1][23]. Market Performance - The communication sector index rose by 5.27% this week, outperforming the Shanghai Composite Index, which increased by 0.88% [2][47]. - Sub-sectors such as optical modules and enterprise communication showed strong performance, with increases of 13.37% and 6.35% respectively [2][51]. Investment Recommendations - Focus on AI development in both cloud and edge computing, with specific attention to companies involved in optical devices and modules [3][55]. - Long-term investment in major telecom operators is recommended due to their stable operations and increasing dividend payouts [3][55]. - Key recommended stocks include China Mobile, Tianfu Communication, and Runze Technology [3][55].