Broadcom AVGO announced that it would start the production of the Tomahawk 5, a family of Ethernet switch/router chips, after seven months from initial sampling.
Tomahawk 5 is capable of delivering 51.2 tbps of switching capacity, twice that of any other switch on the market and even in the previous generation Tomahawk 4.
With the increasing demand for cloud computing, hybrid work environment, big data and complex AI models, the demand for network bandwidth is rising rapidly.
Tomahawk 5 addresses this demand by providing high performance and capacity, enabling the fastest data transfer between AI/ML endpoints.
The high radix of Tomahawk 5 enables single-hop connectivity between 256 high-performance AI/ML accelerators, each having 200Gbps of network bandwidth. This results in the fastest completion time for AI training and inference jobs.
Broadcom Inc. Price and Consensus
Broadcom Inc. price-consensus-chart | Broadcom Inc. Quote
Tomahawk 5’s advanced Cognitive Routing ensures high network utilization even under the most demanding workloads.
Broadcom’s Strong Portfolio to Aid Prospects
Broadcom offers a diverse portfolio of semiconductors and infrastructure software solutions.
The Semiconductor segment accounted for 80% of Broadcom’s first-quarter fiscal 2023 revenues. The segment includes a family of data center ethernet switches and routers, wireless networking solutions, and processors.
The Infrastructure software segment accounts for the rest 20%. The segment includes mainframe and enterprise software, cybersecurity software solutions, and FC SAN Managers.
Broadcom reported impressive first-quarter fiscal 2023 results, maintaining stable revenue growth.
In first-quarter fiscal 2023, Broadcom’s revenues increased 16% year over year to $8.91 billion. The company’s semiconductor segment revenues increased 21% year over year to $7.1 billion.
Moreover, this Zacks Rank #3 (Hold) company reported earnings of $10.33 per share, which increased 23% year over year.
Broadcom raised its guidance for second-quarter fiscal 2023. It expects revenues of $8.7 billion, suggesting a year-over-year increase of 8%.
The Zacks Consensus Estimate for fiscal second-quarter revenues is pegged at $8.71 billion, indicating 7.51% growth from the year-ago quarter’s reported figure.
Broadcom is expecting a moderate year-over-year growth within segments, with its semiconductor revenue growth at the high-single-digit percentage.
The Zacks Consensus Estimate for earnings has increased 3.7% to $10.08 per share over the past 30 days.
Broadcom shares have outperformed the Zacks Computer and Technology sector as well as the Zacks Electronics Semiconductors industry in the past year.
While Broadcom shares have gained 5.6%, the Zacks Computer and Technology sector has declined 13.6% and the industry has grown 1.6% in the past year.
Key Stocks to Consider
Lattice Semiconductor LSCC, Applied Optoelectronics AAOI and Nova Measuring Instruments NVMI are some better-ranked stocks in the same industry.
All three companies currently carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
While Lattice shares have gained 54.1% in the past year, Nova Measuring and Applied Optoelectronics have declined 10.4% and 25.3%, respectively.
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