I'm LongbridgeAI, I can summarize articles.Broadcom Inc. (AVGO.US) announced a very strong artificial intelligence (AI) revenue outlook through fiscal 2028. G Sachs expected the company to outperform the guidance and believed the current valuation remains attractive. The broker maintained its "Buy" rating and raised its 12-month TP from USD525 to USD540.
The broker noted that management expects AI semiconductor revenue to double to more than USD115 billion in fiscal 2027, corresponding to around 10 gigawatts of data center deployments, and to double again to more than USD230 billion in fiscal 2028, corresponding to around 20 gigawatts. In the near term, the company expects AI revenue to grow by more than approximately 100% in fiscal 2026 to USD58 billion. On the customer front, aside from continued growth in Google business, Anthropic is expected to become the largest customer in fiscal 2027, while OpenAI and Meta are also expected to make significant contributions in fiscal 2028. Following the revision, the broker's AI semiconductor revenue forecasts for fiscal 2026/2027/2028 were USD58 billion, USD125 billion and USD240 billion respectively.
Quarterly results were broadly in line with market expectations, with revenue at USD29.6 billion, gross margin at 75% (vs G Sachs estimate of 74.1%), operating margin at 67.9% (vs G Sachs estimate of 67%), and operating EPS at USD3.32. AI semiconductor revenue surged 221% YoY to USD16.7 billion. The company guided for fourth-quarter revenue of USD34.8 billion (vs G Sachs estimate of USD36.2 billion) and adjusted operating margin of 66% (vs G Sachs estimate of 67.5%). The broker slightly lowered its fiscal 2027 forecasts but significantly raised its fiscal 2028 forecasts, lifting average EPS forecasts by 4%. (ad/u)(Real-time Streaming US Stocks Quote; Except All OTC quotes are at least 15 minutes delayed.)