Broadcom’s Q2 Results and Apple Deal
Broadcom (NASDAQ: AVGO) reported second-quarter revenue of $22.2 billion, a 48% increase year-over-year, with adjusted earnings per share rising from $1.58 to $2.44. Despite these strong results, the stock dropped 15% after the earnings announcement due to concerns over AI revenue falling short of expectations. The company reported AI revenue growth of 143%, totaling $10.8 billion and projected a third-quarter revenue of $29.4 billion, reflecting an 84% year-over-year growth.
On Wednesday, Broadcom signed a $30 billion deal with Apple, which includes a $1.5 billion investment to expand a manufacturing facility in Colorado. This partnership aims to strengthen Broadcom’s position in the semiconductor market amidst increasing pressures from major customers like Google, which is diversifying its chip sourcing.
As of now, Broadcom’s stock is trading at a forward P/E of 33.5, raising questions about whether the company can sustain its valuation and growth in the competitive AI landscape.
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