Broadcom (AVGO) Downgraded on Concerns Over Software Segment Growth

Broadcom Inc. (NASDAQ:AVGO) is included among the 15 Best S&P 500 Stocks to Buy Right Now.

Broadcom (AVGO) Downgraded on Concerns Over Software Segment Growth

Broadcom Inc. (NASDAQ:AVGO) designs, develops, and supplies various semiconductor devices and infrastructure software solutions internationally.

On April 2, Erste Group downgraded its rating on Broadcom Inc. (NASDAQ:AVGO) from ‘Buy’ to ‘Hold’. The move comes as the analyst firm projects Broadcom’s software segment to grow at a ‘strongly below-average rate’ in the long term, while expecting its goodwill amortization to hamper earnings growth.

Broadcom Inc. (NASDAQ:AVGO) exceeded estimates in both earnings and revenue in its Q1 2026 results last month. The company’s revenue for the quarter reached a record $19.3 billion, up 29% YoY, driven by a better-than-expected growth in AI semiconductors. The firm expects this growth to continue, with a target to deliver consolidated revenue of approximately $22 billion in Q2 2026, indicating a YoY increase of 47%.

Broadcom Inc. (NASDAQ:AVGO) is projecting its AI semiconductor revenue to grow by 140% YoY in the second quarter, while the infrastructure software revenue is forecasted to deliver an uptick of 9% compared to last year. The company expects its Q2 adjusted EBITDA to come in at approximately 68% of revenue, similar to the last quarter.

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