JPMorgan Sees Upside In Broadcom Ahead Of Earnings: Q3 Revenue Could Top $16 Billion On AI Strength
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Jun 03 2025
0mins
Should l Buy AVGO?
Source: Benzinga
Broadcom's Upcoming Earnings Report: Broadcom Inc is set to report its fiscal second-quarter results on June 5, with expectations of slightly exceeding consensus estimates due to strong demand for AI products and revenue synergies from the VMware acquisition.
Analyst Outlook and Stock Performance: Analyst Harlan Sur maintains an Overweight rating with a price target of $250, predicting third-quarter revenue guidance around $16.1 billion, driven by robust AI revenue growth, while Broadcom shares have risen by 2.25% to $254.30.
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Analyst Views on AVGO
Wall Street analysts forecast AVGO stock price to rise
30 Analyst Rating
29 Buy
1 Hold
0 Sell
Strong Buy
Current: 313.840
Low
370.00
Averages
457.75
High
525.00
Current: 313.840
Low
370.00
Averages
457.75
High
525.00
About AVGO
Broadcom Inc. is a global technology firm that designs, develops, and supplies a range of semiconductors, enterprise software and security solutions. The Company operates through two segments: semiconductor solutions and infrastructure software. Its semiconductor solutions segment includes all of its product lines and intellectual property (IP) licensing. It provides a variety of radio frequency semiconductor devices, wireless connectivity solutions, custom touch controllers, and inductive charging solutions for mobile applications. Its infrastructure software segment includes its private and hybrid cloud, application development and delivery, software-defined edge, application networking and security, mainframe, distributed and cybersecurity solutions, and its FC SAN business. It provides a portfolio of software solutions that enable customers to plan, develop, automate, manage and secure applications across mainframe, distributed, mobile and cloud platforms.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
Broadcom's Q1 Results Exceed Expectations
- Strong Performance: Broadcom reported Q1 fiscal 2026 revenue of $19.3 billion, a 29% year-over-year increase, surpassing analyst expectations of $19.14 billion, demonstrating robust performance amid ongoing demand for AI hardware, which solidifies its market position.
- Surge in AI Revenue: The company's AI-related revenue soared 106% year-over-year to $8.4 billion, marking the 12th consecutive quarter of growth in AI business, indicating that the widespread adoption of AI technology is driving sustained performance improvements.
- Optimistic Outlook: Broadcom projects Q2 revenue to reach $22 billion, a 47% increase year-over-year, well above Wall Street's forecast of $20.4 billion, reflecting strong confidence in future growth, particularly with AI semiconductor revenue expected to surge 140% to $10.7 billion.
- Broader Market Implications: The strong results and positive outlook from Broadcom further corroborate Nvidia CEO's assertion that AI technology has reached an inflection point, suggesting that accelerating demand for AI will create significant opportunities across the industry.
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Nvidia and Broadcom See Surge in AI Demand
- Broadcom's Strong Earnings: Broadcom reported record revenue of $19.3 billion for Q1 2026, a 29% year-over-year increase, surpassing analyst expectations of $19.14 billion, highlighting robust demand for AI hardware and reinforcing its market position.
- Surge in AI Revenue: The company's AI-related revenue soared 106% year-over-year to $8.4 billion, marking the 12th consecutive quarter of AI growth, indicating a significant share in the rapidly expanding AI market.
- Optimistic Future Outlook: Broadcom anticipates Q2 revenue of $22 billion, a 47% increase year-over-year, well above Wall Street's forecast of $20.4 billion, reflecting strong confidence in future AI chip demand.
- Bright Prospects for Nvidia: Nvidia controls 92% of the data center GPU market, and as AI adoption expands downstream, demand for its GPUs is expected to rise, presenting a favorable entry point for investors despite market uncertainties.
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- Market Recovery: The S&P 500 closed up 0.8% at 6,869.50 on Wednesday, ending a three-day losing streak, driven by a strong rebound in technology and semiconductor stocks, although it remains in negative territory for 2026.
- Job Data Beats Expectations: The ADP report revealed that U.S. private employers added 63,000 jobs in February, significantly exceeding the 48,000 consensus and marking a sharp rebound from January's downwardly revised 11,000, indicating a robust economic recovery.
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- Future Outlook: Despite the encouraging rebound on Wednesday, S&P 500 futures were down 0.43% at 6,846.75 at last check, suggesting potential challenges for Thursday's open, especially with upcoming weekly jobless claims and the non-farm payroll report set to test market direction.
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- Earnings Per Share Forecast: The company anticipates fiscal 2027 earnings per share of $8.85, significantly above the Street estimate of $8.58, reflecting a sustained enhancement in its profitability.
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Broadcom Reports Strong Q1 Results Amid Software Growth Slowdown
- Software Segment Slowdown: Broadcom's infrastructure software segment reported a mere 1% revenue growth in Q1 2026, sharply down from 19.2% in Q4 2025 and 46.7% in Q1 2025, indicating diminishing returns from its major acquisition of VMware, which could impact future market competitiveness.
- Strong Overall Performance: The company achieved a 29% increase in total revenue for Q1, reaching $19.31 billion, surpassing estimates of $19.13 billion, while the Q2 revenue forecast of approximately $22 billion reflects robust performance in its AI semiconductor business and key customer partnerships.
- AI Demand Boosts Outlook: Despite the slowdown in the software segment, management anticipates a 9% increase in Q2 software sales to $7.2 billion, with the CEO asserting that the growth in AI will drive demand for VMware software, highlighting its critical role in modern data centers.
- Share Buyback Program: Broadcom announced a new $10 billion share repurchase program aimed at enhancing shareholder value, and although its stock has declined 8.3% year-to-date, shares rose 5.3% in after-market trading following the release of strong earnings.
See More
Broadcom's Q1 Results Exceed Expectations
- Strong Performance: Broadcom reported Q1 fiscal 2026 revenue of $19.3 billion, a 29% year-over-year increase, surpassing analyst expectations of $19.14 billion, demonstrating robust performance amid ongoing demand for AI hardware, which solidifies its market position.
- Surge in AI Revenue: The company's AI-related revenue soared 106% year-over-year to $8.4 billion, marking the 12th consecutive quarter of growth in AI business, indicating that the widespread adoption of AI technology is driving sustained performance improvements.
- Optimistic Outlook: Broadcom projects Q2 revenue to reach $22 billion, a 47% increase year-over-year, well above Wall Street's forecast of $20.4 billion, reflecting strong confidence in future growth, particularly with AI semiconductor revenue expected to surge 140% to $10.7 billion.
- Broader Market Implications: The strong results and positive outlook from Broadcom further corroborate Nvidia CEO's assertion that AI technology has reached an inflection point, suggesting that accelerating demand for AI will create significant opportunities across the industry.
See More
U.S. Senate Fails to Pass Resolution for Iran Withdrawal
- Iran Withdrawal Resolution Fails: The U.S. Senate's failure to pass a resolution demanding President Trump withdraw from military actions in Iran highlights significant congressional divisions over current military policy, despite the resolution's largely symbolic nature.
- Major Update to French Nuclear Policy: French President Macron's announcement to increase the number of nuclear warheads and enhance cooperation with European allies is viewed as the most significant update to France's nuclear deterrence policy in 30 years, potentially reshaping the European security landscape.
- Impact on Indian Remittance Flows: A Citi report indicates that the Indian diaspora in Gulf countries contributes nearly 38% of total remittance inflows, with a total of $135.4 billion in FY 2025, of which $51.4 billion comes from Gulf nations, suggesting that prolonged Middle Eastern conflict could negatively impact India's economy.
- China Sets Record Low GDP Growth Target: The Chinese government has set its GDP growth target for 2026 at 4.5% to 5%, marking the lowest target on record since the early 1990s, reflecting the challenges Beijing faces amid persistent deflationary pressures and trade tensions with the U.S.
See More
Nvidia and Broadcom See Surge in AI Demand
- Broadcom's Strong Earnings: Broadcom reported record revenue of $19.3 billion for Q1 2026, a 29% year-over-year increase, surpassing analyst expectations of $19.14 billion, highlighting robust demand for AI hardware and reinforcing its market position.
- Surge in AI Revenue: The company's AI-related revenue soared 106% year-over-year to $8.4 billion, marking the 12th consecutive quarter of AI growth, indicating a significant share in the rapidly expanding AI market.
- Optimistic Future Outlook: Broadcom anticipates Q2 revenue of $22 billion, a 47% increase year-over-year, well above Wall Street's forecast of $20.4 billion, reflecting strong confidence in future AI chip demand.
- Bright Prospects for Nvidia: Nvidia controls 92% of the data center GPU market, and as AI adoption expands downstream, demand for its GPUs is expected to rise, presenting a favorable entry point for investors despite market uncertainties.
See More
S&P 500 Rises 0.8% to End Three-Day Losing Streak
- Market Recovery: The S&P 500 closed up 0.8% at 6,869.50 on Wednesday, ending a three-day losing streak, driven by a strong rebound in technology and semiconductor stocks, although it remains in negative territory for 2026.
- Job Data Beats Expectations: The ADP report revealed that U.S. private employers added 63,000 jobs in February, significantly exceeding the 48,000 consensus and marking a sharp rebound from January's downwardly revised 11,000, indicating a robust economic recovery.
- Investor Sentiment Improves: Investor jitters regarding U.S.-Iran tensions eased as oil prices stabilized and President Trump's comments on protecting shipping lanes provided reassurance, boosting overall market confidence.
- Future Outlook: Despite the encouraging rebound on Wednesday, S&P 500 futures were down 0.43% at 6,846.75 at last check, suggesting potential challenges for Thursday's open, especially with upcoming weekly jobless claims and the non-farm payroll report set to test market direction.
See More
Veeva Systems Reports Strong Q4 Results and Upbeat FY27 Guidance
- Strong Earnings Report: Veeva Systems Inc. reported fourth-quarter results with revenue guidance between $3.585 billion and $3.600 billion, exceeding the market estimate of $3.56 billion, indicating robust performance in the market.
- Earnings Per Share Forecast: The company anticipates fiscal 2027 earnings per share of $8.85, significantly above the Street estimate of $8.58, reflecting a sustained enhancement in its profitability.
- Stock Price Surge: In after-hours trading, Veeva's shares jumped 11.3% to $209.80, indicating investor optimism regarding the company's future growth prospects.
- Market Attention: With U.S. stock futures trading lower, investors are keenly focused on Veeva's earnings report and outlook, which may influence overall market sentiment.
See More
Broadcom Reports Strong Q1 Results Amid Software Growth Slowdown
- Software Segment Slowdown: Broadcom's infrastructure software segment reported a mere 1% revenue growth in Q1 2026, sharply down from 19.2% in Q4 2025 and 46.7% in Q1 2025, indicating diminishing returns from its major acquisition of VMware, which could impact future market competitiveness.
- Strong Overall Performance: The company achieved a 29% increase in total revenue for Q1, reaching $19.31 billion, surpassing estimates of $19.13 billion, while the Q2 revenue forecast of approximately $22 billion reflects robust performance in its AI semiconductor business and key customer partnerships.
- AI Demand Boosts Outlook: Despite the slowdown in the software segment, management anticipates a 9% increase in Q2 software sales to $7.2 billion, with the CEO asserting that the growth in AI will drive demand for VMware software, highlighting its critical role in modern data centers.
- Share Buyback Program: Broadcom announced a new $10 billion share repurchase program aimed at enhancing shareholder value, and although its stock has declined 8.3% year-to-date, shares rose 5.3% in after-market trading following the release of strong earnings.
See More
