Overview

• US semiconductor and software supplier's Q2 revenue rose 48% yr/yr, slight miss vs expectations

• Adjusted EPS for Q2 beat analyst expectations

• Company's results driven by accelerating demand for custom AI accelerators and networking

Outlook

• Broadcom sees Q3 revenue of about $29.4 bln

• Company expects Q3 non-GAAP operating income at about 67% of projected revenue

• Broadcom expects Q3 adjusted EBITDA at about 68% of projected revenue

Result Drivers

• AI SEMICONDUCTOR GROWTH - Q2 semiconductor revenue from AI rose 143% yr/yr to $10.8 bln, driven by demand for custom AI accelerators and networking, per CEO Hock Tan

• OPERATING LEVERAGE - Co said record operating profit and free cash flow reflected strong operating leverage

• MODEST SOFTWARE GROWTH - Infrastructure software revenue grew 9% yr/yr to $7.2 bln

Company press release: ID:nPn4HsKZ8a

Key Details

Metric	Beat/Miss	Actual	Consensus Estimate
Q2 Revenue	Slight Miss*	$22.19 bln	$22.27 bln (34 Analysts)
Q2 Adjusted EPS	Beat	$2.44	$2.40 (34 Analysts)
Q2 EPS		$1.91
Q2 Net Income		$9.31 bln

*Applies to a deviation of less than 1%; not applicable for per-share numbers.

Analyst Coverage

• The current average analyst rating on the shares is "buy" and the breakdown of recommendations is 47 "strong buy" or "buy", 3 "hold" and no "sell" or "strong sell"

• The average consensus recommendation for the semiconductors peer group is "buy"

• Wall Street's median 12-month price target for Broadcom Inc is $488.00, about 1.3% above its June 2 closing price of $481.57

• The stock recently traded at 31 times the next 12-month earnings vs. a P/E of 28 three months ago

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