Broadcom Q2 earnings beat estimates: Karen Firestone buys $AVGO

Broadcom Inc (NASDAQ: AVGO) is gaining in extended trading on Wednesday after coming in handily above Street estimates for its fiscal second quarter on strong AI demand. 

Broadcom stock climbs on future guidance

Investors seem content also because the management issued upbeat guidance for the future. $AVGO now forecasts about $51 billion in revenue in its fiscal 2024. 

Analysts, in comparison, were at $50.4 billion. Hock Tan - the chief executive of Broadcom Inc said in a press release today:

The Nasdaq-listed firm announced $5.25 a share of quarterly cash dividend on Wednesday. Broadcom stock is up more than 50% for the year at writing. 

Broadcom Q2 earnings snapshot

• Earned $2.12 billion versus the year-ago $3.48 billion
• Per-share earnings also declined from $8.15 to $4.42
• Adjusted EPS printed at $10.96 as per the earnings report
• Revenue jumped 43% year-over-year to $12.49 billion
• Consensus was $10.84 a share on $12.01 billion in revenue

Broadcom noted a 6.0% annualised growth in its semiconductor revenue while its infrastructure software revenue popped a whopping 175% in Q1. According to CFO Kirsten Spears:

Why did Karen Firestone invest in $AVGO?

Ahead of Broadcom earnings release, Karen Firestone of Aureus Asset Management initiated a position in $AVGO citing the AI stock remains attractive at a forward multiple of about 21 times. On CNBC's "Halftime Report", she added:

Firestone is also bullish on VMware that the multinational chipmaker bought for $69 billion last year. She expects that acquisition to drive growth more materially moving forward.

Note that the management announced plans of a 10-for-1 forward stock split to make $AVGO more accessible to investors on Wednesday.