Broadcom (AVGO) is advancing 5.5% after the chip maker delivered stronger-than-expected fiscal first-quarter results. The company’s revenue outlook for its current quarter also came in significantly above analysts’ average outlook.
Morgan Stanley raised its price target on AVGO in the wake of its results.
A technician working at a magnified microscope, developing a new integrated circuit.
The Highlights of AVGO’s Q1 Results and Q2 Guidance
Broadcom’s sales jumped 25% last quarter to $14.9 billion as the firm benefited a great deal from the AI boom. Analysts on average had predicted that its top line would come in at $14.6 billion. It generated Q1 EPS of $1.60, well above analysts’ average estimate of $1.50.
For the current quarter, AVGO expects sales of about $14.9 billion, versus the mean outlook of $14.6 billion.
Broadcom’s Comments
AVGO is producing many more chips for the operators of large data centers and raising the amount it’s spending on R&D related to these chips, CEO Hock Tan reported on AVGO’s earnings call.
The company now has a total of seven customers that operate large data centers, Hock reported, adding that AVGO had recruited two of the firms since Broadcom’s last earnings call.
Morgan Stanley Raised Its Price Target
The investment bank raised its price target on AVGO to $260 and kept an Overweight rating on the shares. Morgan Stanley found the strength of the company’s AI ethernet business to be “encouraging” and predicts that AVGO will grow rapidly for the “next several years.”
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This article is originally published at Insider Monkey.
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