Key Takeaways AVGO's fiscal Q4 Semiconductor revenue is expected to rise 30% YoY, driven by strong AI accelerator demand. AI revenues are projected to grow 66% YoY to $6.2B, with XPUs making up 65% of that segment's Q3 total. Infrastructure Software revenue is set to rise 15% YoY, aided by VMware's traction and VCF 9.0 adoption. Broadcom’s (AVGO) fourth-quarter fiscal 2025 results, set to be reported on Dec. 11, are expected to reflect the benefits of expanding AI offerings. AVGO’s Semiconductor segment rev ...

Key Takeaways AVGO expects Q4 revenue of $17.4B, up 24.5% year over year, driven by AI and software growth.AI revenues are projected to jump 66% to $6.2B, led by demand for custom accelerators like XPUs. Gross margin is forecast to dip 70 bps sequentially due to a higher mix of lower-margin XPUs. Broadcom (AVGO) is set to report its fourth-quarter fiscal 2025 results on Dec. 11.For fourth-quarter fiscal 2025, AVGO expects revenues of $17.4 billion. The Zacks Consensus Estimate for revenues is pegged at $17. ...

Key Takeaways Credo posts Q2 gross margin of 67.7% and revenues up 20% sequentially and 272.1% year over year.Strong AEC and IC demand plus disciplined expenses fueled sharp operating and net-margin gains.Fiscal 2026 guidance points to mid-single-digit sequential growth and roughly 170% annual revenue growth.Credo Technology Group Holding Ltd (CRDO) delivered another record-setting quarter in the second quarter of fiscal 2026, showcasing not only powerful top-line momentum but also notable margin expansion. ...

Group 1: Broadcom Inc. (AVGO) - Broadcom's shares have outperformed the Zacks Electronics - Semiconductors industry with a year-to-date increase of 68.7% compared to 48% for the industry [5] - The company is experiencing strong momentum driven by growth in AI semiconductors and successful VMware integration, with AI revenues expected to rise 66% year over year to $6.2 billion in Q4 fiscal 2025 [6][7] - Over 90% of Broadcom's largest 10,000 customers have adopted VCF, although gross margin is expected to contract sequentially due to high debt levels [7] Group 2: Meta Platforms, Inc. (META) - Meta's shares have outperformed the Zacks Internet - Software industry with a year-to-date increase of 9.1% compared to 5.4% for the industry [8] - The company benefits from steady user growth, particularly in Asia Pacific, and increased engagement across platforms like Instagram and WhatsApp [9] - Meta plans to invest significantly in developing advanced AI models, although monetization of these services may take time [9] Group 3: The Coca-Cola Co. (KO) - Coca-Cola's shares have outperformed the Zacks Beverages - Soft drinks industry with a year-to-date increase of 19.3% compared to 10.3% for the industry [10] - The company's performance is supported by solid organic revenue growth, effective pricing, and gains in global market share [10][11] - Despite facing pressures from soft volumes in key regions and currency headwinds, Coca-Cola's focus on innovation and digital transformation enhances its competitive edge [11][12] Group 4: Landmark Bancorp, Inc. (LARK) - Landmark Bancorp's shares have outperformed the Zacks Financial - Savings and Loan industry with a year-to-date increase of 24.7% compared to 2.9% for the industry [13] - The company benefits from a stable economic backdrop in Kansas, supporting demand for various credit types [13][14] - Ongoing loan expansion and improving asset yields contribute to steady net interest income and resilient margins [14][15] Group 5: Bridger Aerospace Group Holdings, Inc. (BAER) - Bridger Aerospace's shares have underperformed the Zacks Aerospace - Defense industry with a year-to-date decrease of 13.2% compared to a 26.8% increase for the industry [16] - The company faces cash flow pressure due to concentrated receivables and high fixed costs, with delays in the Spanish Scooper program impacting monetization [16][17] - Despite challenges, Bridger benefits from a global undersupply of amphibious aircraft, which supports strong pricing and high utilization [18]

Core Insights - Broadcom is currently the seventh-largest company globally by market capitalization, valued at $1.6 trillion, yet remains relatively unknown to many investors [2][1] - The company has significant potential to become a household name, particularly due to the anticipated increase in AI spending [3] AI Business Opportunities - Broadcom operates in various technology sectors, including cybersecurity, mainframe hardware and software, and a virtual desktop platform through its VMware acquisition, but its AI computing segment is expected to see substantial growth [5] - The AI business consists of connectivity switches used in data centers and custom AI accelerators, known as XPUs, which are designed collaboratively with end users [6][7] - XPUs are tailored for specific workloads, allowing them to outperform traditional GPUs at a lower cost, capitalizing on the growing standardization of AI workloads [8] Market Potential - Nvidia projects that global data center capital expenditures will reach $3 trillion to $4 trillion by 2030, presenting a significant opportunity for companies involved in AI, including Broadcom [9] - In fiscal Q3 2025, Broadcom reported a 22% year-over-year revenue increase to $15.9 billion, with AI revenue growing 63% year-over-year to $5.2 billion, and an anticipated $6.2 billion in AI revenue for Q4 [9][10] Valuation and Investment Outlook - As AI becomes a larger part of Broadcom's business, the overall growth rate is expected to increase, potentially transforming the company into a top-tier growth stock [10] - Broadcom's stock is currently valued at over 50 times forward earnings, indicating a high valuation despite the growth potential [12] - Long-term investors may find Broadcom a compelling investment opportunity, especially as it is expected to gain market share from Nvidia due to its purpose-built AI chips [13]

Core Insights - Broadcom is expected to report record AI revenue, with significant growth in both its semiconductor solutions and infrastructure software segments following the acquisition of VMware [4][5] - The company reported AI revenue of $4.4 billion in Q2 fiscal 2025, a 46% year-over-year increase, and is guiding for $5.1 billion in Q3 AI revenue [7][9] - Broadcom's AI revenue accounted for 29% of total revenue last quarter, indicating strong growth potential in the AI sector [8] Segment Performance - The semiconductor solutions segment is projected to grow from $28.2 billion in fiscal 2023 to $30.1 billion in fiscal 2024, while the infrastructure software segment is expected to rise from $7.6 billion to $21.5 billion [4] - Broadcom's AI growth is driven by custom AI accelerators (XPUs), which are designed for hyperscalers and are part of the semiconductor and software segments [6][10] Market Dynamics - Broadcom's serviceable addressable market for AI chips could reach $90 billion by fiscal 2027, with expectations for hyperscale customers to double accelerator cluster sizes [10][11] - The potential for Broadcom's ASICs to be preferred over GPUs in data centers could reshape the competitive landscape, especially in the context of Nvidia's strong AI business [12] Investment Implications - Broadcom's performance on September 4 is critical for both its investors and the broader market, as it has significantly outperformed other major tech stocks over the past five years [13][15] - The combined market cap growth of Nvidia and Broadcom has created approximately $5 trillion in market value, highlighting their influence on the stock market [15][16] - Sustaining AI momentum could further concentrate the S&P 500 in large growth stocks, which has historically led to higher gains but also increased volatility [17]

Core Insights - Broadcom's third-quarter fiscal 2025 results are expected to show significant growth driven by expanding AI offerings, particularly in the Semiconductor segment, with AI revenues increasing 46% year over year to $4.4 billion in Q2 2025 [1][9] - The demand for AI networking solutions surged 170% year over year, accounting for 40% of total AI revenues in Q2 2025, highlighting the strong market for Broadcom's Ethernet-based AI networking solutions [2][9] - Broadcom anticipates a 25% year-over-year increase in semiconductor revenues to $9.1 billion and a 60% surge in AI revenues to $5.1 billion for the fiscal third quarter [3] Semiconductor Segment - The Zacks Consensus Estimate for Semiconductor revenues is projected at $9.114 billion, reflecting a growth of 25.3% compared to the previous year [3] - The operating income for the Semiconductor segment is estimated at $5.152 billion, indicating a 27.5% increase year over year and a 7.2% sequential growth [7] Infrastructure Software Segment - The Infrastructure Software segment is expected to benefit from VMware's growing traction, with revenues estimated at $6.7 billion, representing a 15.6% year-over-year growth [5][4] - The operating income for Infrastructure Software is projected at $5.048 billion, implying a 29.2% increase from the previous year but only a 1.2% sequential growth [7] Margin Considerations - Despite the growth in sales of lower-margin XPUs, Broadcom expects a decline in gross margin by 130 basis points sequentially, with an adjusted EBITDA margin forecasted at 66%, suggesting a 70-basis point decline [6]

Core Insights - Broadcom (AVGO) is expected to report third-quarter fiscal 2025 results on September 4, with projected revenues of $15.8 billion, indicating a 21.1% year-over-year growth [1][10] - The consensus estimate for earnings remains at $1.66 per share, reflecting a 33.9% increase from the previous year [1] Revenue Expectations - AVGO anticipates semiconductor revenues to rise 25% year-over-year to $9.1 billion, while Infrastructure Software revenues are expected to grow 16% year-over-year to $6.7 billion [7] - AI revenues are projected to increase by 60% year-over-year to $5.1 billion, driven by investments from hyperscaler partners [6][10] Business Segment Performance - The company expects sluggishness in server storage, wireless, and industrial businesses, but growth in enterprise networking and broadband [4] - Non-AI semiconductor revenues are expected to remain flat sequentially at around $4 billion [4] Margin and Profitability - Gross margin is anticipated to decline by approximately 130 basis points sequentially, with an adjusted EBITDA margin of 66%, indicating a 70 basis points decline [5] - A higher mix of lower-margin XPUs is expected to keep gross margin under pressure throughout fiscal 2025 [20] Stock Performance - AVGO shares have returned 28.2% year-to-date, outperforming the broader Zacks Computer and Technology sector and the Zacks Electronics - Semiconductors industry [9] - The stock is currently trading at a forward P/E of 37.05, which is higher than its median and industry averages, suggesting a stretched valuation [13] Long-Term Prospects - Broadcom's long-term prospects are bolstered by the growing demand for AI infrastructure and custom AI accelerators [16] - The company sees significant opportunities in the AI space, with plans from hyperscalers to deploy 1 million XPU clusters by 2027 [17] Strategic Developments - Strong results at VMware are expected to contribute to top-line growth, with a focus on shifting VMware products to a subscription-based model [8] - The Jericho4 Ethernet fabric router is a key product that supports the interconnection of over one million XPUs, enhancing Broadcom's networking solutions [19]

Group 1: Company Overview - Advanced Micro Devices (AMD) is leveraging a strong partner ecosystem, including Microsoft, Oracle, Google, Dell, HPE, Lenovo, and IBM, to enhance its presence in the AI infrastructure market, facing competition from NVIDIA and Broadcom [1][10] - AMD's EPYC processors are in high demand for cloud and enterprise workloads, with significant adoption by major cloud hyperscalers [2][10] Group 2: Product Developments - The launch of the Instinct MI350 series has strengthened AMD's system-level capabilities, supporting deployments with AMD CPUs, GPUs, and NICs [3] - AMD has formed a multibillion-dollar collaboration with HUMAIN to develop AI infrastructure powered by its CPUs, GPUs, and software [3] Group 3: Financial Performance - AMD anticipates third-quarter 2025 revenues of $8.7 billion, reflecting a 28% year-over-year increase and 13% sequential growth [5][10] - The Zacks Consensus Estimate for third-quarter 2025 earnings is projected at $1.17 per share, indicating a 21.2% year-over-year growth [11] Group 4: Competitive Landscape - AMD faces tough competition from NVIDIA, which is central to AI computing with its advanced GPUs, and Broadcom, which provides networking chips and custom ASICs for efficient hyperscale data centers [6][7] Group 5: Stock Performance and Valuation - AMD shares have increased by 39.2% year to date, outperforming the broader Zacks Computer and Technology sector and the Zacks Computer Integrated industry [8] - AMD's stock is considered overvalued with a forward 12-month price/sales ratio of 7.46X compared to the sector's 6.7X [9]

Industry Overview - The Zacks Electronics - Semiconductors industry is facing macroeconomic challenges, end-market volatility, inventory corrections, and geopolitical tensions, particularly due to tariffs affecting trade partners like China [1][7] - Despite these challenges, the industry is benefiting from the rise of AI, Generative AI, IoT, Machine Learning, and industrial revolution 4.0, which focus on interconnectivity and automation [1][3] Demand Drivers - The demand for AI-supportive chips from hyperscalers is a significant growth driver, alongside the increasing need for high-volume consumer electronic devices such as smartphones and robotics [1][3] - Smart devices require advanced computing capabilities for functions like face detection and image recognition, which necessitate high processing power and low power consumption [4] Advanced Technologies - The demand for advanced semiconductor packaging and test technologies is growing due to the need for miniaturization, greater functionality, and improved performance [5] - The complexity of semiconductor manufacturing processes is increasing as manufacturers aim to maximize yields at lower costs, driven by the adoption of cloud computing, IoT, and AI [6] Market Performance - The Zacks Electronics - Semiconductors industry has outperformed the S&P 500 and the broader Zacks Computer and Technology sector over the past year, appreciating 51.5% compared to 29.1% and 20.3% respectively [11] - The industry currently trades at a forward 12-month price-to-earnings ratio of 34.32X, higher than the S&P 500's 22.69X and the sector's 28.15X [14] Key Companies - Broadcom (AVGO) is experiencing strong momentum from AI semiconductor growth, with expected AI revenues of $5.1 billion for Q3 fiscal 2025, a 60% year-over-year increase [17] - Applied Materials (AMAT) is benefiting from a rebound in the semiconductor industry, particularly in the foundry logic space, and has a diversified portfolio that supports its growth [19]