Broadcom First Take Solid Quarter and Guidance

Broadcom reported Q2 results in line with expectations but provided Q3 AI revenue guidance of $16.0 billion, missing the Street estimate of $16.4 billion. Goldman Sachs maintains its Buy rating with a $500 target, despite expecting near-term stock pressure from elevated expectations.

Key Takeaways

• 1.Broadcom delivered a solid quarter with Q2 revenue of $22.2 billion and margins largely in line with expectations, though AI revenue guidance for Q3 came in slightly below Street estimates.
• 2.Stock performance is expected to be modestly down in the near term as high investor expectations for AI growth were not fully met by the forward guidance.
• 3.Goldman Sachs maintains a Buy rating and a $500 12-month price target, citing potential in the custom compute franchise and AI infrastructure spending.

Table of Contents

• Key stock takeaways
• Quarterly results were in line with the Street
• 3Q guidance is above the Street, but AI revenue is slightly below
• Price target and risks
• Disclosure Appendix
• GS Factor Profile
• M&A Rank
• Quantum
• Disclosures
• Company-specific regulatory disclosures
• Distribution of ratings/investment banking relationships
• Price target and rating history chart(s)
• Target price history table(s)
• Regulatory disclosures
• Global product; distributing entities
• General disclosures