With all eyes on the upcoming earnings report from Nvidia, semiconductor peer Broadcom readies a report of its own due June 5. Now Broadcom stock – a new member of IBD Leaderboard – has etched and just cleared a new buy point with its relative strength line on the rise.
The artificial intelligence chip designer also earns a spot on Investor's Business Daily's Big Cap 20 screen. Broadcom earns the highest-possible 99 Composite Rating, outpacing Nvidia stock, which earns a score of 97.
Broadcom Earnings Forecasts – And Other Predictions
With earnings due next week, Broadcom has already posted three quarters of accelerating earnings growth. On March 6, the AI chip designer posted a 45% spike in earnings growth for the fiscal first quarter. Earnings per share came in at $1.60. Sales rose 25% to $14.9 billion.
When Broadcom next reports on June 5, analysts forecast 20% revenue growth to $15 billion. Earnings are expected to grow 43% to $1.57 per share. For the full fiscal year, Wall Street predicts 36% earnings growth to $6.61 per share.
As analysts make their forecasts, Broadcom has leveraged AI to make some predictions of its own. Last month, the company introduced Incident Prediction, which leverages advanced AI and Symantec Endpoint Security to help predict cybercriminals' moves in the attack chain. Broadcom acquired Symantec's enterprise security business in 2019.
The new capability aims to stop living-off-the-land attacks. These so-called LOTL attacks are a type of cyberattack in which hackers use legitimate features already installed on a target system to unleash malicious activities.
Nvidia Stock Braces For Impact Of China Trade Ban
Broadcom Stock Teases Breakout
As Nvidia takes aim at an early entry at 143.44, Broadcom stock has punched past a 235.28 buy point in a first-stage cup with handle. Heading into Wednesday's close, shares remain within buy range.
In a sign of rising technical strength, Broadcom's 21-day exponential moving average has bounced back above its 50-day line. Also, the 50-day line has just climbed back above the longer-term 200-day moving average.
How Nvidia reports and how Wall Street reacts will surely impact fellow AI chip leader Broadcom in the lead-up to the unveiling of its own quarterly performance next month.
Investors should also note that while Broadcom is not considered a Magnificent Seven stock, it remains neck-and-neck with Tesla in terms of market-capitalization weighting on the Nasdaq. Both megacaps make up around 3% of the tech-heavy index.
Follow Matthew Galgani on X (formerly Twitter) at @IBD_MGalgani.
