The Zacks Analyst Blog Broadcom, Alphabet and Meta

For Immediate ReleasesChicago, IL – March 4, 2025 – Zacks.com announces the list of stocks and ETFs featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include Broadcom AVGO, Alphabet GOOGL and Meta Platforms META.Here are highlights from Tuesday’s Analyst Blog:Should You Add Broadcom Stock Ahead of Q1 Earnings This Week?Broadcom is set to report its first-quarter fiscal 2025 results on March 6.Find the latest EPS estimates and surprises on Zacks Earnings Calendar.For first-quarter fiscal 2025, AVGO expects revenues of $14.6 billion. The Zacks Consensus Estimate for revenues is pegged at $14.62 billion, suggesting growth of 22.23% from the year-ago quarter’s reported figure.The consensus mark for earnings has been unchanged at $1.50 per share over the past 30 days, indicating 22.23% growth from the figure reported in the year-ago quarter.Broadcom’s earnings beat the Zacks Consensus Estimate in the trailing four quarters, the average earnings surprise being 3.57%.Broadcom Inc. price-eps-surprise | Broadcom Inc. QuoteLet us see how things have shaped up for AVGO shares prior to this announcement.Factors to Note Prior to Broadcom’s Q1 EarningsBroadcom’s fiscal first-quarter performance is expected to have benefited from its expanding AI and Gen AI offerings. AI revenues are anticipated to jump 65% year over year to $3.8 billion. AI connectivity revenues are likely to be strong in the fiscal first quarter as hyperscalers continue to deploy Jericho. Non-AI semiconductor revenues are expected to decline in the mid-teen percentage on a year-over-year basis.For the to-be-reported quarter, semiconductor revenues are anticipated to jump 10% year over year to $8.1 billion. Infrastructure Software revenues are expected to grow 11% sequentially and 41% year over year to $6.5 billion. VMware’s annual booking value is expected to surpass $3 billion.The Zacks Consensus Estimate for fiscal first-quarter Semiconductor Solutions revenues are pegged at $8.17 billion, indicating 10.6% year-over-year growth. The consensus mark for Infrastructure Software revenues is pegged at $6.48 billion, indicating 41.8% year-over-year growth.Strong results at VMware are expected to have driven top-line growth. Broadcom’s focus on shifting VMware products to a subscription-based model is expected to have driven top-line growth in the to-be-reported quarter.A favorable revenue mix, and higher Infrastructure Software and product revenues within the Semiconductor segment are expected to have driven an expansion of 100 basis points in the gross margin on a sequential basis. Broadcom expects an adjusted EBITDA margin of 66% in the to-be-reported quarter.AVGO Shares Outperform SectorIn the trailing 12 months, AVGO shares have returned 42.2%, outperforming the broader Zacks Computer and Technology sector’s return of 15.1% and the Zacks Electronics - Semiconductors industry’s appreciation of 15.2%.The AVGO stock is not so cheap, as the Value Score of F suggests a stretched valuation at this moment.In terms of the forward 12-month price/sales ratio, Broadcom shares are trading at 14.61X, higher than its median of 13.15X and the industry’s 7.45X.Strong AI Portfolio Aids Broadcom’s Long-Term ProspectsAVGO’s long-term prospects are expected to benefit from the growing demand for AI infrastructure and the robust deployment of the GenAI portfolio. A solid portfolio is helping expand clientele that includes Alphabet and Meta Platforms. Its strong partner base, including Arista Networks, Dell Technologies, Juniper and Supermicro, has been a key catalyst.Strong demand for Broadcom’s application-specific integrated chips (ASICs), designed to support AI and machine learning and make these tasks more efficient, aids top-line growth. Alphabet and Meta Platforms are notable users of Broadcom’s ASICs.The acquisition of VMware has benefited Infrastructure software solutions. Since closing the acquisition, AVGO added more than 4500 of its largest 10,000 customers to VMware Cloud Foundation, which enables enterprises to deploy private cloud environments on-premise.AVGO sees massive opportunities in the AI space as specific hyperscalers have started to develop their XPUs. Per the company, each of AVGO’s three hyperscalers plans to deploy 1 million XPU clusters across a single fabric by 2027. Serviceable Addressable Market for XPUs and network are expected between $60 billion and $90 billion for fiscal 2027 alone.Broadcom’s focus on reducing its debt is noteworthy. The company paid off $2.81 billion of short-term debt in fiscal 2024, and $1.25 billion is due within the next 12 months. AVGO’s strong cash flow-generating ability is expected to help the company sustain its dividend payout, as well as lower its debt level simultaneously.ConclusionBroadcom’s strong portfolio, along with an expanding partner base, reflects solid top-line growth potential over the long run. We believe that these factors justify the premium valuation.Broadcom currently has a Zacks Rank #2 (Buy), suggesting that it is the right time to buy the stock ahead of the first-quarter fiscal 2025 results. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.Why Haven't You Looked at Zacks' Top Stocks?Since 2000, our top stock-picking strategies have blown away the S&P's +7.7% average gain per year. Amazingly, they soared with average gains of +48.4%, +50.2% and +56.7% per year.Today you can access their live picks without cost or obligation.See Stocks Free >>Note: Sheraz Mian heads the Zacks Equity Research department and is a well-regarded expert of aggregate earnings. He is frequently quoted in the print and electronic media and publishes the weekly Earnings Trends and Earnings Previewreports. If you want an email notification each time Sheraz publishes a new article, please click here>>>Media ContactZacks Investment Research800-767-3771 ext. 9339support@zacks.com                                     https://www.zacks.com                                                Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance  for information about the performance numbers displayed in this press release.Only $1 to See All Zacks' Buys and SellsWe're not kidding.Several years ago, we shocked our members by offering them 30-day access to all our picks for the total sum of only $1. No obligation to spend another cent.Thousands have taken advantage of this opportunity. Thousands did not - they thought there must be a catch. Yes, we do have a reason. We want you to get acquainted with our portfolio services like Surprise Trader, Stocks Under $10, Technology Innovators,and more, that closed 256 positions with double- and triple-digit gains in 2024 alone.See Stocks Now >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Broadcom Inc. (AVGO): Free Stock Analysis Report Alphabet Inc. (GOOGL): Free Stock Analysis Report Meta Platforms, Inc. (META): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks