Broadcom stock dips after Q3 results, Q4 revenue forecast slightly misses expectations

From NASDAQ: 2024-09-09 14:45:00

Broadcom Inc. (AVGO) stock saw a major decline after releasing Q3 results with revenues of $13.07 billion, an increase from last year but in line with estimates. Q4 revenue forecast of $14 billion fell slightly short of expectations, sparking a 10% drop in share price on Friday. However, AVGO remains above the 200DMA.

CEO Hock Tan expects AI business revenue to grow to $12 billion by fiscal 2024. The recent VMware acquisition has boosted revenue growth. AVGO generated strong free cash flow of $4.791 billion in Q3, up 4.2% year over year, with a margin of over 36%. This indicates the company’s ability to pay debts and drive shareholder wealth through dividends.

Despite being expensive with a forward P/E ratio of 28.9X, analysts see strong upside potential for Broadcom stock. Current price targets suggest a 57.1% increase from the last closing price. Investors may want to wait for a better entry point or hold onto their positions for the long term as AI technology continues to drive growth.



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