Broadcom is gearing up to release its third-quarter earnings, and all eyes are on how the semiconductor giant will perform amidst a turbulent chip market.
Senior analyst Stacy Rasgon from Bernstein rates Broadcom as an “Outperform,” calling it the “second-best AI story in the space” for its chip designs powering tech titans like Google and Meta.
However, Broadcom’s core business has been hit hard by a cyclical downturn in the industry, making it a tough year overall.
Rasgon is optimistic about Broadcom’s software arm, VMWare, forecasting it as a major catalyst for growth over the next year.
He emphasizes that, even in a challenging market, Broadcom boasts some of the best margins and free cash flow metrics in the chip sector.
Despite this, Broadcom trades at a notable discount to its peers, offering potential upside for investors willing to bet on its AI momentum and strong business fundamentals.
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