I voted for +3 ~ 8%.

The rapid adoption of AI has been a boon to Broadcom, particularly since generative AI exploded onto the scene in late 2022. The company's Application-Specific Integrated Circuits (ASICs) can be customized to accelerate AI processing, making it a more energy-efficient option than competing graphics processing units (GPUs). Moreover, Broadcom's reach extends beyond semiconductors, with its networking solutions spanning every corner of data center operations.

Management expects its accelerating growth to continue. For Q3, Broadcom is guiding to revenue of $29.4 billion, representing 84% growth, and adjusted EBITDA of roughly $20 billion, up 87%. That would mark a significant acceleration compared to the company’s Q2 results.

Risks: On the flipside, Marvell was a good example of beating earnings but cautious guidance could cause a reevaluation of the stock's valuation. With Broadcom's P/E ratio already at ~61, some traders might short the stock prior to earnings, despite the fact that Broadcom's forward p/e ratio of 20 and PEG of 0.70 is actually pretty undervalued.

My prediction: $380