Broadcom Inc.’s (NASDAQ:AVGO) upcoming results are set to spotlight the company’s accelerating artificial intelligence business, with investors watching fiscal 2026 revenue guidance and gross margin trends closely.Goldman Sachs analyst James Schneider maintained Broadcom with a Buy and raised the price forecast from $380 to $435.Schneider expects Broadcom’s upcoming results to center on fiscal 2026 AI revenue guidance, along with Alphabet Inc.’s (NASDAQ:GOOGL) Google and OpenAI contributions and the gross m ...

Our view on key metrics and our estimates: We expect sustained AI strength in 4Q, with 1Q guidance above the Street given robust spending at key customers - and we expect updated FY26 AI revenue guidance above 100% YoY. We forecast FY26/27 AI revenue of $45.4 bn/$77.3 bn (+128%/+70% YoY respectively). Items on the call that could move the stock: (1) Updated AI guidance for FY26 - Given positive datapoints from key XPU customer Google and strong results from Nvidia, we believe investors expect an update to A ...

Core Insights - The article emphasizes the potential for significant growth in investments related to artificial intelligence (AI), with expectations that spending on AI infrastructure will exceed $3 trillion over the next three years [1][2]. Company Summaries Broadcom - Broadcom is highlighted as a leading semiconductor company with a strong history of high double-digit growth in free cash flow, currently at $25 billion, and is expected to grow at an annualized rate of 37% [3][7]. - The company reported a 63% year-over-year increase in AI-related product revenue last quarter, driven by robust demand for advanced chips and networking components [4][6]. - Broadcom's custom AI accelerators are a significant contributor to its AI revenue, and the company is well-positioned due to limited competition in the semiconductor space [6][4]. Microsoft - Microsoft is recognized for its strong position in cloud computing, with a recent 18% year-over-year revenue growth and a 40% increase in Azure revenue, making it one of the fastest-growing cloud providers [8][11]. - The company's cloud services generate recurring revenue, significantly lowering its risk profile, with cloud revenue accounting for approximately two-thirds of its business [9][10]. - Analysts project Microsoft's free cash flow to grow at an annualized rate of 23%, indicating a strong potential for stock appreciation by 2030 [13][12].

Group 1: Broadcom (AVGO US) - The report initiates coverage on Broadcom with a "Buy" rating, setting a target price of $425, indicating a potential upside of 24.1% from the closing price of $342.46 [1] - Broadcom is expected to be the second-largest company in terms of AI exposure among those covered, with projected AI semiconductor revenue growth of 87% CAGR from fiscal years 2025 to 2027, and EPS growth of 33% CAGR during the same period [1][2] - The company has established a leading position in ASIC acceleration chip technology through over a decade of collaboration with Google, and has signed development agreements for xPU acceleration chips with five major clients [2] Group 2: Financial Projections - For fiscal years 2025, 2026, and 2027, Broadcom's total revenue is projected to be $633.5 billion, $898.8 billion, and $1,170.7 billion, respectively, with Non-GAAP gross margins of 78.4%, 73.9%, and 70.8% [3] - Non-GAAP diluted EPS is forecasted to be $6.84, $9.51, and $12.00 for the fiscal years 2025, 2026, and 2027 [3] Group 3: VMware Integration - The integration results of VMware have exceeded expectations, contributing positively to Broadcom's growth outlook driven by AI [3] - The report emphasizes the importance of AI communication networks in data center chips, predicting significant revenue contributions from AI-related businesses in the upcoming fiscal years [2] Group 4: Legend Biotech (LEGN US) - Legend Biotech continues to reduce losses in Q3 2025, with a revenue increase of 70% year-on-year and 7% quarter-on-quarter, driven by high growth expectations for Carvykti sales in 2026 [4][7] - The projected sales for Carvykti in 2026 are expected to reach $2.8 billion, a 45% year-on-year increase, supported by expanded applications in frontline treatments and anticipated approval for Raritan's expansion [4] - The management maintains guidance for achieving commercial profitability for Carvykti in 2025 and overall breakeven for the company in 2026 [4]

Core Insights - Broadcom (AVGO) shares have increased by 106.3% over the past 12 months, significantly outperforming the Zacks Electronics – Semiconductors industry's return of 71.4% and the broader Zacks Computer and Technology sector's growth of 30.7% [1][2] - The company is experiencing strong demand for XPUs, which are essential for training Generative AI models, leading to a substantial increase in AI revenues [1][6] Company Performance - In Q3 of fiscal 2025, Broadcom's AI revenues rose by 63% year over year to $5.2 billion, with XPUs contributing 65% of total AI revenues [6][10] - The consolidated backlog reached $110 billion, and the company secured over $10 billion in orders for AI racks driven by XPU demand [6][10] - Broadcom anticipates Q4 semiconductor sales to increase by 30% year over year, with software revenues expected to rise by 15% [7][10] Product Development - Broadcom launched the first Wi-Fi 8 silicon solutions for the broadband wireless edge ecosystem and began shipping the Tomahawk 6 - Davisson Ethernet switch, designed for AI networking demands [7][9] - The Jericho 4 Ethernet fabric router can interconnect over one million XPUs across multiple data centers, and the Thor Ultra is the first 800G AI Ethernet Network Interface Card [9][10] Market Position - Broadcom's partner base includes major companies like OpenAI, Walmart, and Meta Platforms, which is expected to drive top-line growth [10] - The company is outperforming competitors such as NVIDIA, Marvell Technology, and AMD in terms of stock performance [2][10] Financial Outlook - The Zacks Consensus Estimate for fiscal 2025 earnings is $6.72 per share, indicating a 38% growth from fiscal 2024, with revenues projected at $63.36 billion, suggesting a 22.9% increase [13] - However, a higher mix of lower-margin XPUs is expected to pressure gross margins, with a forecasted decline of 70 basis points sequentially [11][12] Valuation Concerns - Broadcom's stock is considered overvalued, trading at a forward price/sales ratio of 18.72X, significantly higher than the sector average of 6.85X and competitors like NVIDIA and AMD [14][17] - Despite strong growth potential, the declining gross margin and challenging macroeconomic conditions raise concerns about the premium valuation [17][18]

Core Insights - Celestica's CEO Rob Mionis emphasized the company's role in supporting the AI infrastructure, stating that the technology has transitioned from a "nice to have" to a "must have" [1] - The company reported earnings that exceeded estimates and raised its full-year outlook, resulting in a stock increase of over 8% and a year-to-date rise of 253.68% [1] Business Strategy - Celestica has shifted its focus from commodity markets to design and manufacturing, a decision that Mionis claims has significantly benefited the company [2] - The emphasis on design and manufacturing allows Celestica to execute consistently at scale [2] Data Center Operations - The company specializes in high-speed networking and storage systems for hyperscalers and digital native companies [3] - Celestica has a strategic partnership with semiconductor maker Broadcom, utilizing Broadcom's silicon in many of its designs [3] Product Development - When Broadcom launches new silicon products, such as the Tomahawk 6 with 1.6 terabytes, Celestica collaborates to develop products that are supplied to major hyperscalers [4]

Group 1: Company Performance and Projections - Broadcom's Semiconductor revenues are benefiting from strong demand for XPUs, which constitute 65% of AI revenues in Q3 fiscal 2025, and the expanding portfolio is expected to further boost sales in fiscal 2025 [1] - AI revenues for Q4 fiscal 2025 are projected to increase by 66% year over year to $6.2 billion, while Semiconductor sales are expected to grow by 30% year over year to $10.7 billion [4][10] - The Zacks Consensus Estimate for Semiconductor sales is pegged at $10.76 billion, indicating a growth of 30.8% from the previous year [4] Group 2: Product Launches and Innovations - In June, Broadcom announced the shipment of Tomahawk 6, the world's first 102.4 terabits per second Ethernet switch, and has since started shipping Tomahawk 6 – Davisson, its third-generation Co-Packaged Optics Ethernet switch [2] - The Jericho 4 Ethernet fabric router announced in August can interconnect over one million XPUs across multiple data centers, and the Thor Ultra, announced recently, is the first 800G AI Ethernet Network Interface Card capable of supporting trillion-parameter AI workloads [3] - New launches like Tomahawk 6 and Thor Ultra are strengthening Broadcom's AI networking portfolio [10] Group 3: Competitive Landscape - Broadcom faces stiff competition in the semiconductor market from NVIDIA and Marvell Technology [5] - NVIDIA's networking revenues surged by 98% year over year to $7.3 billion, driven by strong demand for AI compute clusters [6] - Marvell Technology is benefiting from strong data center demand, with its Cloud and on-premise Ethernet switching accounting for 74% of net revenues in Q2 fiscal 2026 [7] Group 4: Stock Performance and Valuation - Broadcom shares have appreciated by 47.8% year to date, outperforming the broader Zacks Computer and Technology sector's return of 24.5% [8] - The stock is trading at a forward 12-month price/earnings ratio of 37.83X, compared to the sector's 29.41X, indicating a premium valuation [12] - The Zacks Consensus Estimate for fiscal 2025 earnings is pegged at $6.73 per share, suggesting a growth of 38.2% from fiscal 2024 [15]

Core Insights - Broadcom Inc. has introduced Thor Ultra, the industry's first 800G AI Ethernet Network Interface Card/NIC, which is designed to manage trillion-parameter AI workloads and interconnect hundreds of thousands of XPUs [1][3] - Thor Ultra is compliant with the Ultra Ethernet Consortium/UEC specification, allowing for high performance and efficiency in scaling AI workloads while minimizing reliance on proprietary solutions [2][3] Product Features - The new NIC includes advanced RDMA innovations such as Packet-Level multipathing for load balancing, Out-of-Order packet delivery to maximize fabric utilization, Selective retransmission for efficient data transfer, and congestion control algorithms [3] - Thor Ultra is a significant addition to Broadcom's Ethernet AI networking portfolio, which also features products like Tomahawk 6, Jericho 4, and Scale-Up Ethernet/SUE [1] Company Overview - Broadcom Inc. designs, develops, and supplies a variety of semiconductor devices and infrastructure software solutions globally, operating in two segments: Semiconductor Solutions and Infrastructure Software [4]

Group 1 - Broadcom Inc. is set to showcase significant advancements in AI networking solutions at the Open Compute Project Global Summit from October 13 to October 16, 2025 [1][2] - The company will present innovations such as the third-generation TH6-Davisson Co-packaged Optics, Tomahawk 6, Tomahawk Ultra, and Jericho4 Ethernet switches, aimed at enhancing scale-up Ethernet networking [2] - Broadcom operates through two segments: semiconductor solutions and infrastructure software, providing a wide range of semiconductor products and enterprise software solutions [3] Group 2 - The company will collaborate with over 20 partners to demonstrate various innovations at the summit, highlighting its commitment to advancing AI technology [2]

Core Insights - Broadcom Inc. (NASDAQ:AVGO) is recognized as one of the top American semiconductor stocks to invest in, with significant advancements in AI networking solutions to be presented at the 2025 Open Compute Project (OCP) Global Summit [1] Group 1: Product Innovations - Broadcom will showcase innovations such as the Tomahawk 6, Tomahawk Ultra, and Jericho4 Ethernet switches, along with the third-generation TH6-Davisson Co-packaged Optics (CPO) [2] - The Tomahawk 6 and Jericho4 switches provide the necessary power and capacity for large-scale AI infrastructures, while the Tomahawk Ultra offers ultra-low latency switching for high-performance applications [3] - The TH6-Davisson co-packaged optics Ethernet switch enhances link reliability and reduces power consumption, complementing the overall AI infrastructure solutions [3][4] Group 2: Market Position - Broadcom Inc. is a multinational technology company that designs, develops, and supplies a diverse range of semiconductor, enterprise software, and security solutions, positioning itself strongly in the AI and networking sectors [4]