AVGO EPS Thurs

Not as Easy as It Looks....Here is Why

Broadcom (AVGO) did everything right down the middle of the fairway last quarter. They raised their overall revenues from $50 billion to $51 billion for the FY 2024. They raised their EBITDA margin by 1% point from 60 to 61%. Heck, they even announced a 10 for 1 stock split. Perfection Hock Tan, Perfection! The set up this quarter is far different and Hock will need to reach into his bag of tricks, “look over here, no look over there” word salad unless he can truly upside his AI metrics. Why? Last quarter, the AI revenues of $3.1 billion (part of the networking segment) were up $800m sequentially (presumably on custom ASIC ramp with Google) and Hock specifically guided the fiscal year to a strong $11 billion in AI revenues. What’s not to like? We will tell you now after you look at the model below…..